In a brief report by BlockFyre, the team outlined the drastic increases in fundamental indicators and compared it to the price of Ether. The key takeaway? Network usage has completely decoupled from the price of Ether, with BlockFyre concluding that the network’s native asset has become significantly undervalued.
1) We charted several progress indicators for Ethereum against its price development since its genesis.
Besides other factors, the following 4 indicators have caught our interest the most.
We feel comfortable to state that Ethereum is significantly undervalued at current prices pic.twitter.com/RezhESApZk
— Blockfyre (@blockfyre) May 26, 2020
Development activity is near all-time-highs and demand for blockspace broke new records early this week. All while the price of ETH steadily follows the path of Bitcoin.
What does EY, Reddit, and Visa all have in common? They’re all building on Ethereum.
EY’s baseline protocol is nearing mainnet launch, providing a new suite of enterprise-grade development tools for building and deploying procurement and other business processes on the public Ethereum network. In short, the launch of Baseline will establish a new platform for corporations and other large companies to securely and privately build applications on Ethereum.
Reddit also launched the first round of testing for “Community Points”, ERC-20 tokens representing ownership, reputation, and contributions to a subreddit. The testing began with integrations with /r/FortniteBR and /r/CryptoCurrency. Within the first week of launch, the Fortnite subreddit has already done more token transfers than the cryptocurrency subreddit. Yes, a group of predominantly gen Z’s with little experience in blockchain or crypto assets are using Ethereum more than a crypto-focused subreddit. That’s a good sign.
In case you missed it, within the same week, Visa also filed a patent for a “digital fiat currency” a.k.a, a stablecoin. The patent mentioned “Ethereum” nearly a dozen times throughout the documentation. While they don’t specify using Ethereum’s public network, it’s still an intriguing development to look out for in the coming months.
Even better, none of this progress accounts for the thousands of web3 developers currently heads-down building out the next generation of finance with DeFi. Protocols like Maker, Compound, and Uniswap are all beginning to serve as gravity wells for global assets – both traditional and crypto.
Demand for Ethereum’s Blockspace
The demand for Ethereum’s blockspace has also hit all time highs. In the past 30 days, Tether (USDT) has spent $1.70M on gas fees while DeFi protocols like IDEX, Kyber, dYdX, and Uniswap combine to consume nearly $500,000 in fees.
The demand for Ethereum as a global settlement layer for financial assets has never been higher. There’s a dollarization occurring on Ethereum, led by Tether, USDC, and others, enabling a new asset class of steroid-fueled digital dollars. As it stands today, Ethereum stablecoins are nearing $10b in total market cap, an increase of roughly 2x since the beginning of the year.
The best part? This will happen to every major asset class in existence. It’s only a matter of time before stocks, bonds, commodities, real estate and others decide to leverage Ethereum as a credibly neutral settlement layer.
Today, Centrifuge 🌀 unlocks trillions of real-world value in DeFi with our Decentralized Asset Financing Protocol.
— Centrifuge (@centrifuge) May 26, 2020
While the demand for blockspace is not always correlated to the price of ETH, EIP-1559 has the potential to drive significant effects on the scarcity of ETH in return for using the network as a settlement layer.
Icing on the Cake
All of this is happening while Ethereum 2.0 is on the precipice of launching Phase 0. Prysm’s Topaz Testnet has over 37,000 active validators and over 600,000 attestations happening on the beacon chain.
All of the work done today for ETH2 is almost entirely directed towards bug fixes and teams synchronizing all the clients into a single testnet. This may take a few months, however, it’s nearly impossible to deny that Ethereum’s major upgrade is simply around the corner.
Something is brewing in the Ethereum ecosystem. A perfect storm. As prominent community member Ryan Sean Adams stated, “It’s 2016 again”.
Reddit, EY, DeFi, Eth2, all of these things are the fuel to the fire. Now all we need is the spark.
Then the explosion.