Ethereum started the work week, May 3rd, with a new all time high of $3,000. Less than a year ago you could buy one Ethereum for just under $200, now, as of publication, each Ethereum is being traded at $3,400 dollars, a 1700% increase! Compared to bitcoin, with a 633% increase from May 4, 2020, how is that Ethereum is out pacing the cryptocurrency communities top dog.
To answer this question we need to look back at what has transpired in the crypto space during the past year.
First, Decentralized Finance (which I covered in an earlier article titled DeFi: Finance Democratized) has exploded in legitimacy with several projects providing compelling use cases as alternatives to conventional banking services. Decentralized Applications (Dapps) include Aave, a “decentralized lending system that allows users to lend, borrow and earn interest on crypto assets” (Kraken), Uniswap, a decentralized exchange protocol, and Binance Coin, a cryptocurrency that can be used to pay fees and trade in the binance exchange. Each of these are some of the largest DeFi projects by market cap, (with Binance Coin (BNB) at 3rd, Uniswap (UNI) at 9th, and Aave (AAVE) at 28th) and all of them run on the Ethereum network. Ethereum is also home to 212 other DeFi projects.
The reason this is important is because when protocols run on the same network it allows users to go between projects without ever leaving the Ethereum ecosystem, thus motivating further projects to operate on the same network as the most prominent protocols. This has convinced many, including myself, that Ethereum will prove to be more dominant as the crypto space grows. Additionally, the supply of Ethereum is set to decrease soon as new updates occur, naturally increasing the scarcity of the digital asset.
As things stand, Ethereum is sitting pretty as the world's top decentralized ecosystem with a total market cap of $390 billion (CoinMarketCap). With its closest competitor, Cardano, having a market cap of $42 billion, Ethereum appears well positioned to continue its dominance and further propel itself towards new all time highs.
If you enjoy these articles, consider subscribing.