Ethereum accounts for 51% of value held on the blockchain
With the rise of altcoins and stablecoins, the value of ETH only comprises 51% of its blockchain according to the CEO of Messari.
According to Ryan Selkis who is the CEO of Messari, a crypto analytics firm, the aggregate value of all ERC-20 tokens has increased drastically to $25.6 billion, and now accounts for 49% of the total assets on the Ethereum blockchain.
The recent heightened value of ERC-20 tokens, such as LINK, CRO, and COMP, has threatened Ethereum dominance in the DeFi space – as ETH now accounts for only 51% of the total value on the Ethereum blockchain.
Selkis stated, “Ether now only accounts for 51% of the value secured on the Ethereum blockchain, which is the smallest amount on a percentage basis that it’s accounted for in its history. The other 49% of the value stored on Ethereum now incentivizes economic activity beyond the maintenance and execution of the Ethereum blockchain”.
ERC-20 are tokens designed specifically to run on the Ethereum blockchain. Together, they can be shared and exchanged for each other, creating an ecosystem of altcoins within the Ethereum blockchain.
These tokens are not only a form of crypto investment, but also a facilitator of the DeFi industry.
DeFi, or decentralised finance, uses smart contracts on Ethereum blockchain to recreate traditional financial instruments without the usual drawbacks of intermediaries. The blockchain also solves the issue of bank accessibility.
Recent developments in the DeFi space, such as the introduction of the Compound (COMP) token, increased the price of the altcoin by 365% from initial value. It started at $80 and rose to an all-time high of $350.
Recently, LINK also increased by 370% in value. This is likely due to the increased usage of DeFi, where the demand for decentralised oracles that make smart contracts work, such as Chainlink, have risen quickly.
CRO rose from $426 million to $2.6 billion, and is now a major value component of the Ethereum blockchain.
Some experts have speculated on how the LINK token has been able to record such an incredible amount of short-term growth. Cointelegraph has speculated that the meteoric rise in LINK might be the result of, “an elaborate pump-and-dump scheme by Chainlink”.
While many suggest that the rapid growth in DeFi is a bubble, this will only be known after the fact.
The COMP token release was a massive success, with people pouring their digital assets into it. However, it has fallen from record highs, and is sitting at around half of its recent highs at the time of writing.
No SPAM ever!
Alt coin news
Keep updated with our round the clock and in-depth cryptocurrency news.
No SPAM ever!
Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.
CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.
Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.
When trading in stocks your capital is at risk.
Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.