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The Ethereum platform, founded over five years ago, and its domestic ether (ETH) existed in public mainly in the shadow of Bitcoin. However, especially in the last few months, Ethereum has gained momentum. In July this year, it was reported that usage of the Ethereum network has surpassed that of Bitcoin.
In the past few weeks, Ethereum has been of great interest, especially in connection with the DeFi boom. Ethereum and ETH are well worth a visit – and here's why.
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1. Going through a period of increased volatility
Ether has been more volatile than Bitcoin in the past few weeks. Due to the volatility metrics, the interest rates in the last week of August were 29 percent, which is a six-month high. Most recently, the price of ETH rose 30 percent in just ten days between August 27 and September 6, hitting the highest price since the fourth quarter of 2018 ($ 485), and then fell again by 33 percent .
This volatility, which is unusual at this rate even for cryptocurrencies, is attributed to the increase in DeFi usage and interest rates. Traders and crypto asset owners will want to watch ETH prices even more closely these days.
2. The DeFi market boom
DeFi (decentralized finance) has seen tremendous growth in recent months as dapps that facilitate lending, borrowing, and smart contracts suddenly become more numerous and popular. The total value set in DeFi hit an all-time high of over $ 9.5 billion on September 2, an increase of almost 800 percent over the past three months.
The vast majority of DeFi Dapps are located in the Ethereum network – of the currently 247 available Dapps, 201 are in Ethereum (another 24 for Bitcoin and 22 for EOS).
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3. The Ethereum 2.0 update
At the beginning of August this year, the long-awaited Ethereum 2.0 update – known as Serenity – was released. The platform has been vastly improved, including a significant improvement in efficiency through sharding. The increase in the processing capabilities of Ethereum means the network can process a lot more transactions, which facilitates the increase in DeFi usage.
4. Serenity ensures that Ethereum continues to grow
Towards the end of 2019, the previous version of Ethereum encountered major efficiency problems as well as rising ether prices. The Serenity update resolved these issues and provided growth opportunities for the platform. Ethereum is in a period of explosive growth – as evidenced by the rise in DeFi's total value.
5. The functionality of Ethereum is constantly being expanded
Innovations in how the capabilities of Ethereum can be applied not only to various aspects of asset management but also to daily life are common as new features are added. For example, the already very useful and popular use of smart contracts has recently been expanded to include dapps like Chainlink, which facilitate communication between blockchain-based protocols and off-chain information sources.
This suggests that the number and variety of practical uses of Ethereum-based dapps will continue to grow to ensure further growth of the platform and the value of ETH's cryptocurrency. Additionally, it is worth keeping up with Ethereum-related news to keep up with blockchain innovations and identify opportunities for new types of business ventures.
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6. Ethereum is the platform of choice for stablecoins
Ethereum's flexible digital contract functionality is great for issuing stablecoins – cryptos that are tied to a fiat currency to minimize the volatility factor. The two most stable and most significant coins are Tether and USDC – both based on Ethereum and both in a period of extensive (and relatively constant) growth over the past year, with assets from USD 1 million to over 7 million in 12 months . USD has risen.
7. Compound and other decentralized money markets
One of the biggest players in the DeFi market is Compound – a money market protocol that allows users to earn interest or borrow assets against crypto collateral. The connection is based on Ethereum and is also seeing explosive growth. In the several months of its existence, the company has raised roughly $ 700 million in assets – and in June it played a major role in DeFi's boom by helping to run liquidity. In total, Ethereum's decentralized money market platforms – Maker and Synthetics being the other top platforms alongside Compound – control over $ 2 billion.
8. The number of ether whales is increasing
"Aether Whales" are users who hold between 1,000 and 10,000 ETC – which is currently around $ 350,000 to $ 3 million. At the end of August, two unknown Aether Whales moved 189,735 ETH worth around 80.88 million US dollars separately from each other, which aroused considerable public interest in ETH and its native Ethereum. On September 7th, another unknown whale transferred ETH worth $ 76 million.
Even more interesting is the fact that in early September, when the ETH price fell by about 30 percent, 68 new whales came into play.
9. Offers different ways to make a profit
From Ethereum mining to water taps and staking, there are many ways to design ETH with sufficient processing power or risk tolerance. DeFi-Dapps based on Ethereum offer new users further incentives to immerse themselves in the world of crypto, e.g. B. Liquidity mining and the ability to borrow fiat against crypto collateral.
10. Stay here
Ethereum is not a fad – the ever-growing platform and technology behind it will continue to grow over time. As a completely decentralized system with no fulcrum, it is practically impossible for Ethereum to go offline. The potential of Ethereum-based apps means that ETH will stay here too – the platform's home currency is required for entering into contracts and providing dapps. While Bitcoin is still generally trending higher than Ethereum, the two platforms (and their cryptos) serve different purposes – so there's no risk of BTC completely overtaking ETH.
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