Mesari analyst highlights Ethereum excellence compared to Bit.. Defi advantages explained

Ryan Watkins, chief research analyst at cryptocurrency analysis site Messari, predicts that on the 18th (local time), the market cap of Ethereum (ETH) will soon exceed Bitcoin (BTC). In an interview at FinTech Today, which specializes in fintech information such as blockchain, he mentioned the future of DeFi (decentralized finance) and the status of NFT (non-replaceable tokens). Coinpost reported this on the 20th.

Messari is a data site specializing in the analysis and investigation of on-chain data of cryptocurrency. As Bitcoin’s share in the cryptocurrency market fell in 2017, some predicted the possibility of’Flippening’.

Flippening refers to the phenomenon (possibility) that the market capitalization of Ethereum surpasses Bitcoin, which has long been the No. 1 cryptocurrency market cap.

[The difference between Bitcoin and Ethereum]

In 2020, as the economic situation fell into chaos due to the coronavirus, digital gold bitcoin as a hedge asset became a hotspot of traditional finance.

However, Watkins pointed out that “gold attracts attention from investors from speculative factors as hedges, but other than that, it is only used for accessories, and it is not practical.” Like gold, he explained that “Bitcoin has few use cases,” he said, and “it is unlikely to be used as a global currency because of the extreme price fluctuations.”

In contrast, saying, “Ethereum is used for various dApps by the smart contract function, has a variety of use cases, and has a wealth of targetable layers,” and describes Ethereum as a “decentralized app store.” Representative examples of use cases using smart contracts include DEX (decentralized exchange), yield farming (DeFi relationship), and issuance of NFTs or tokens.

Ethereum argued that the infrastructure that can create a new independent economic zone (DeFi) system without accepting it from the existing financial sector is its strength, and argued that Ethereum will be a true Internet money for digital gold’s bitcoin.

In addition, if Ethereum is formally transferred to ETH 2.0 and PoS (Proof of Stake) in the future, ETH will be burned, so it is possible to exceed the market cap of Bitcoin as a structure that deflation (currency circulation contracts) is established rather than Bitcoin. Said it would be a factor.

[New economic sphere: DeFi]

In addition, Watkins explained that DeFi, which has been rising rapidly since last summer, is a new economic sphere, and its main pillars are stablecoins, DEX, lending and derivatives.

According to Google Trend, the number of DeFi searches has steadily increased since last summer. It reached the highest level in the past at the end of February.

[DEX showing signs of underestimation]

In particular, for DEX, most of them explained that the transaction volume is increasing rapidly. As an example of a pioneering DEX, Uniswap (UNI), as of March last year, had a daily transaction value of 10 million to 15 million dollars (11.3 billion to 17 billion won), but is now around 1 billion dollars (about 1.13 trillion won). It is said that it showed 100-fold growth. On the other hand, he pointed out that one of the factors that the price of governance tokens such as UNI has not risen proportionally is that the recognition is still not very high compared to the rapid growth.

However, the sharp rise in the price of bitcoin in 2020 became an opportunity to attract attention again in cryptocurrency, and it is expected that the public interest will expand to Ethereum and DeFi after bitcoin.

[Ethereum Milestone]

After appreciating the future of Ethereum in this way, Watkins cited the following two milestones for Ethereum.

– DeFi’s TVL: reached 100 billion dollars
– DEX trading volume exceeds Coinbase and Binance

TVL (Total Value Locked) is an index indicating the total amount locked up in the DeFi protocol. Wakins said that the TVL of the current DeFi protocol on Ethereum is about one-third of the target value, and now it is roughly one-third, but if you include DeFi platforms other than Ethereum, it is now about $75 billion.

In addition, it is pointed out that it will be a big milestone when the transaction volume of DEX such as Uniswap reaches the level equal to that of Coinbase or Binance. As for DEX’s task, unlike “CeFi” (centralized exchange) that complies with regulations such as Coinbase, it was mentioned that there is currently no KYC (customer identification) function.

However, since DEX is a relatively new area, it is an attitude that we must watch the progress in the future.

[About NFT]

In addition, regarding the booming NFT, it can be a factor for the mainstreaming of the cryptocurrency industry, while the (user) experience is not progressing and the use case is not fully exhibited, so the possibility of temporary is undeniable. .

Nowadays, the speculative aspect that pays attention to the success of successful bids and soaring sales prices is growing, and it is considered that it is reminiscent of the ICO of 2017. However, among the ICOs, some projects with potential are said to lead to the current active Ethereum ecosystem, and NFT was highly evaluated from the perspective of long-term prospects.

According to a post by Nick Tomaino, founder of cryptocurrency investment company 1confirmation, there is a situation where the number of Google searches for “NFT” significantly exceeds the entire cryptocurrency.

(暗号資産(仮想通貨) Analysis Site Messari’s Siniarisate Analyst’s Ryan Watkins’s 18th, Ethaliam (ETH)’s time-to-be, BTC)特化したFinTech Today でのインタビューでDeFi の将来性 and NFT (non-genuine nature トークン) の現況について言及した。)

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Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.