Last week’s piece evaluated competition from alternative smart contract chains such as Cardano and Binance Smart Chain. Today, we’ll look at major developments contributing to bullish fundamentals underlying ETH price, as well as reasons why BSC and Cardano do not, as of yet, pose a real threat to Ethereum.
EIP 1559 Likely Boosting Price
Last week, the market received the news that the long-awaited Ethereum Improvement Proposal (EIP) 1559 has been tentatively greenlit for July.
The proposal, which creates a fairer and more transparent transaction fee market, has been controversial due to its ETH-burning mechanism. The mechanism, which is required to prevent collusion among miners, has been largely welcomed by the Ethereum community but fought heavily by miners who will see their transaction fee revenues (which have soared in recent months) considerably reduced.
The proposal has had less than 50% of the mining community’s support, making the announcement that the proposal is now planned as part of Ethereum’s July update a surprise to many.
Many analysts strongly feel that the proposal will place upward pressure on the price of ETH as Ethereum’s supply inflation will fall dramatically – possibly even becoming deflationary over time.
NFT Market in Full Swing With Multi-Million Dollar Tweet Auction
Twitter CEO jack Dorsey put his first ever tweet up for auction as an NFT last week, with the highest bid reaching $2.5 million.
The bid was made by Bridge Oracle CEO Sina Estavi. NFT volume has now reached over $400 million according to nonfungible.com. The CryptoPunks series accounts for over $100 million of that volume.
NFTs are non-fungible tokens – individual tokens with a unique identifying address with no two being the same. They can be used to denote ownership of or association to real-life or digital assets, allowing the owners of intellectual property to represent their work as an NFT and sell or trade it.
Mike Winkelmann, AKA Beeple, sold a piece of video art as an NFT for $6.6 million, and that holds the current record for most expensive NFT.
Winklemann’s 5000 Days collection is being sold at Christie’s auction house of London, the first mainstream auction of digital art. Bidding now stands at $3.5 million.
Ethereum’s Emerging Economy
The fact that the NFT market alone is worth $400 million gives a sense of the scale of today’s Ethereum economy.
Competing chains such as BSC and Cardano pale in comparison, with Cardano pumping heavily in price last week despite the fact that no active projects have been built on the network to date.
While BSC has offered value to the space by picking up the slack from Ethereum’s overburdened network, the chain has a long way to go before it comes close to hosting the kind of value and activity that lives on Ethereum today.
The strength in Ethereum’s fundamentals has not gone unnoticed by wealthy investors, with whale accounts picking up the highest percentage of ETH supply since 2017.
Whales now own 68% of all circulating ETH.
The Blockchain Africa Conference will be held online next week on March 18. The event features 35 speakers including “investors, startups, enthusiasts, developers, corporates, policy makers and regulators,” and over 1,000 attendees are registered so far.
The event will cover a broad range of topics spanning logistics and legal issues to media, insurance, utilities, media, and other aspects of the blockchain space.
The virtual BII Summit will be held online from Dubai on March 09. The event features speakers from VC firms like Aaro Capital and Sustany Capital as well as various media and blockchain tech companies. The goal of the summit is to connect blockchain companies with potential investors.