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Founded over five years ago, the Ethereum platform and its native ether (ETH) have existed mostly in the shadow of bitcoin in the public eye. However, Ethereum has been gathering momentum particularly in the past few months. In July this year, it was reported that the use of the Ethereum network has surpassed that of bitcoin.
In the last few weeks, Ethereum has been the subject of much interest, particularly in the context of the DeFi boom. Ethereum and ETH are well worth watching closely – and here’s why.
1. Going through a period of increased volatility
Ether has been more volatile than bitcoin in recent weeks. Volatility metrics put the rates at 29 percent in the last week of August, which constitutes a six-month high. Most recently, in the space of just ten days between August 27 and September 6, the price of ETH increased by 30 percent to reach the highest price since Q4 of 2018 ($485) only to drop again by 33 percent.
This volatility – unusual at this rate even for crypto currencies – is attributed to the increase in DeFi use and interest. Traders and crypto asset holders will want to keep an even closer watch on ETH prices these days.
2. The DeFi market boom
DeFi (decentralized finance) has seen huge growth over the past few months, as dapps facilitating lending, borrowing and smart contracts are suddenly becoming more numerous and popular. The total value locked in DeFi reached an all-time high on September 2 at over $9.5 billion, which signifies an almost 800 percent increase over the past three months.
The vast majority of DeFi dapps are on the Ethereum network – of the 247 dapps currently available, 201 are on Ethereum (with another 24 on bitcoin and 22 on EOS).
3. The Ethereum 2.0 update
At the beginning of August this year, the long-awaited Ethereum 2.0 update – known as Serenity – was launched. It brought significant enhancements to the platform, including a major improvement in efficiency through sharding. The increase in Ethereum’s processing capabilities means that the network is able to handle many more transactions – facilitating the rise in DeFi usage.
4. Serenity ensures that Ethereum will continue growing
Towards the end of 2019, Ethereum’s previous version was running into major efficiency issues, as well as increasing ether prices. The Serenity update resolved these issues, providing opportunities for growth for the platform. Ethereum is going through a period of explosive growth – as evidenced by the rise in the total value of DeFi.
5. Ethereum’s functionality keeps expanding
Innovations in how Ethereum’s capabilities can be applied to various aspects of not only asset management but also daily life, are frequent, as new functionalities are being added. For instance, the already highly useful – and popular – use of smart contracts has recently been augmented by dapps such as Chainlink, which facilitates communication between blockchain-based protocols and off-chain sources of information.
This suggests that we’ll keep seeing expansion in the number and variety of practical applications offered by Ethereum-based dapps, ensuring further growth of the platform and value of the ETH crypto currency. Plus, it’s worth following Ethereum-related news to keep up with blockchain innovation and spot opportunities for new kinds of business ventures.
6. Ethereum is the platform of choice for stablecoins
Ethereum’s flexible digital contract functionality lends itself extremely well to the issuance of stablecoins – cryptos pegged to a fiat currency in order…