The store of value narrative has largely been applied to Bitcoin over the past couple of years. BTC is often labeled ‘digital gold’ and this year’s hodling has proved that people are still willing to hold on to it for a longer term. Ethereum is evolving in a different way but it is also turning into a similar store of wealth as the ecosystem matures.
Ethereum Flips Itself
A recent article from the owner of ETH metrics portal ethereumprice.org has delved into some token utility charts which reveal an interesting trend developing. The charts indicate that Ether currently accounts for less than half of all transactions on the network.
— 0xNick.eth (@0xEther) November 18, 2019
According to Coin Metrics data there are roughly 300,000 daily ERC-20 transactions compared to about 290,000 ETH transactions. Ethereum appears to have flipped itself.
The Ethereum blockchain has a vibrant and active token economy which is clearly growing as this trend indicates. The report added that ‘Ethereum’s native token has passed on the torch to assets with greater transaction utility than its own.’
This could leave ETH investors scratching their heads wondering where the next price action momentum is coming from. If Ethereum is not being used for transactions, where is the utility coming from?
Ethereum is evolving and a new ecosystem is forming called decentralized finance. As Bitcoin has turned from peer-to-peer digital cash into digital gold, Ethereum is also moving into the realms of a store of wealth rather than a utility token.
The DeFi ecosystem is embryonic at the moment but has shown monumental growth this year as more ETH is staked onto lending and borrowing platforms managed by smart contracts. According to defipulse.com there is currently 2.5 million ETH locked in DeFi which is up over 90% on the same time last year.
This emerging industry has the…