Every month this market throws something unexpected. While you can try to predict what the trends are, the pace at which things change, grow and die can be staggering at times.

At the end of last year we were excited about the Dai Savings Rate (DSR) – an interest rate applied to the Dai stablecoin that, at its high of 8.75% in February 2020, provided a very good risk-adjusted return on deposits.

In between then and now we have seen a meteoric rise in DeFi that has led to yet another classic crypto cycle with euphoric highs and miserable lows. In amongst all of this were overnight successes, shady launches, outright scams, catastrophic exploits and plenty of zero sum games.

As users scrambled to generate absurdly high yields and capital growth, gas prices reached unprecedented levels, squeezing out huge swathes of Ethereans. Gamers, collectors and merchants found Ethereum uneconomical and even a $10,000 purse would struggle to turn profit in DeFi as fees ballooned into the hundreds. The cycle, which has now fizzled to a fraction of its peak, ended with Uniswap’s incredible crescendo – a $100 million airdrop to its historical users.

With the euphoria now fading, the hardwork that underpins each bull run has come to the forefront. Today, Synthetix launched their second Layer 2 scaling demo using the optimistic rollup tech created by Optimism. By moving to Layer 2, low and medium sized SNX holders are, once again, able to participate in minting sUSD and trading on the platform.

This technology is also expected to be used by Uniswap, Chainlink and others when it reaches mainnet (soon™).

ETH’s collapse from a 2-year high of $488 to today’s price of $340 is perhaps less a case of the “DeFi bubble” bursting and more a result of the incredibly difficult macroeconomic backdrop that all markets are facing.

Both a second wave of Covid-19 and the possibility of a contentious and uncertain US election result is holding back excitement – that, in different times – may have already seen ETH rally to new highs.

When considering Ethereum in isolation, the outlook is extremely positive. Heavyweight changes on the horizon like ETH 2’s Phase 0, Uniswap’s V3 and Optimism’s mainnet launch are all set to propel Ethereum forward, leading to a major upgrade for the ecosystem and creating more fundamental value for all of Ethereum’s stakeholders. Yet when we consider the broader market, which is currently witnessing a melting pot of economic uncertainties, it’s hard to imagine how or when this fundamental value will be realized in the price of ETH.

As an investor, it might be prudent to consider that while ETH has dipped dramatically in recent weeks, it has done so not for any fundamental failing of Ethereum, but as part of a sweeping macroeconomic collapse that has left few markets untouched. So long as Ethereum developers continue to build (and they are building more than ever), the trend for the blockchain, at least fundamentally, remains upwards.