Certain metrics tied to Ethereum’s ongoing surge in network activity and price is nearing levels seen previously in the infamous 2018 ICO market, a report noted in its Q2 market outlook.
Same Conditions, Different Outcome
Xangle – a research firm focused on-chain analytics for cryptocurrencies – recently released its report on “Decentralized Finance (DeFi) in Q2 2020.” Firm analyst Jehn Kim said transactional volumes had increased over 62%, reaching a yearly-high in June 2020. Fees have also grown as a result – rising approximately 600% compared to last year.
Kim said the activity mirrors “the spike seen during the bull run in 2017-2018.” At the time, Ethereum reached an all-time high of $1,400 (on some exchanges); led by widespread market attention and ICOs issuing billions of dollars worth of obscure ERC20 tokens.
However, despite similar on-chain activity this year, Ethereum has not responded as it did in 2018. Kim said the network’s “on-chain indicator activity needs to be reconsidered” as it languishes at a price of $230 (ETH has surged to over $325 since the report was published).
As the above image shows, metrics for new addresses, active addresses, and network “freshness” are now at 2018 levels. This shows significant user activity, retail interest, and the creation of new Ethereum wallets.
Kim, in the report, said the above metrics can be attributed to the ongoing boom in Ethereum-issued DeFi tokens. Some of these include Yearn Finance and Compound, whose tokens have surged over 100x since their issuance.
Kim’s thoughts have been echoed by Ryan Watkins of Messari, the report noted:
“Many DeFi tokens are up triple digits on the year, and excitement around these projects is reminiscent of the early days of the 2017 ICO boom.”
ETH 2.0 a Catalyst?
The upcoming ETH 2.0 “Serenity” update – the protocol’s shift to a proof-of-stake consensus design – could account for a large number of new wallets created.
As BTCManager previously reported, wallets holding 32 ETH or more have hit an all-time high. The number is the minimum amount of ether needed to run a validator node on the upcoming network upgrade.
Reports suggest investors expect up to 9 percent of ETH-accrued “interest” on their initial staked capital. So far, the launch date for Serenity has not been released. Some rumors put it at a July launch, a point which Ethereum co-founder Vitalik Buterin shot down over Twitter.
At press time, over 120,000 wallets hold above 32 ETH. Such nodes that will replace the miners, such as Bitmain or AntPool, to validate transactions and maintain the Ethereum blockchain.
Whatever the case, Ethereum’s on track for a stellar 2020 – or so it seems.
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