Ethereum: Why ETH is So Valuable! My Predictions!! 🔮
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📺 Useful Vids 📺
ETH Vid Jan 👉 https://www.youtube.com/watch?v=NLr2HMz_tvg
ETH Scaling 👉 https://www.youtube.com/watch?v=bz0y5zUZBaE
Polygon Video 👉 https://www.youtube.com/watch?v=34wQaNSvi10
- TIMESTAMPS –
0:00 Intro
2:25 Why ETH Has Value
6:45 DeFi Demand
8:23 Stablecoin Demand
11:28 NFTs
14:12 ETH L2 Scaling
17:13 EIP 1559 & PoS
20:05 Price Potential
23:54 Conclusion
⛓️ 🔗 Useful Links 🔗 ⛓️
► Proof of Stake Explained: https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/
► Fat Protocol: https://www.usv.com/writing/2016/08/fat-protocols/
► Metcalfe's Law: https://seekingalpha.com/article/4399431-ethereum-to-repeat-bitcoins-move-to-20k-given-metcalfs-law
► Merge Vitalik: https://notes.ethereum.org/@vbuterin/B1mUf6DXO
► Optimism Delay: https://www.theblockcrypto.com/post/99511/ethereum-scaling-solution-optimism-delays-mainnet-launch-estimates-july
► ETH 2.0 Deposits: https://duneanalytics.com/hagaetc/eth2-0-deposits
► QuickSwap: https://info.quickswap.exchange/
🍔 Fat Protocol 🍔
Perhaps one of the most relevant that I have seen is that of the “Fat Protocol” theory
This was an investment model that was first popularised by Joel Monegro over at Union Square Ventures – one of the most well known VCs in the world
It is based on the notion that Ethereum has built a protocol that is most able to capture value – hence the term “Fat”
This is compared to some of the established protocols out there like TCPIP which are “thin”. All of the value in these protocols is concentrated in the application layer. There is no value that accrues to the protocol layer. This is different in the case of Ethereum where the network benefits from dApp use
You also have Metcalfe’s law that dictates the value of a network is proportional to the square of users on it. So, it is essentially an exponential functoin of all the users on the network
📈 ETH Demand 📈
Recently, Ethereum network demand has been surging. You only need take a look at the total number of active addresses on the Ethereum network. This is at an all time high at over 580,000 addresses
This is being drive by
- Defi: Thousands of dApps with over 50 billion in TVL
- Stablecoin Demand: Billions has been issued on the Ethereum Network
- NFTs: These are all minted on the Ethereum network and requries gas in order to do it.
All of these factors add to the argument of ETH value according to the Fat protocol as well as Metcalfe’s law.
📈 Layer 2 Scaling 📈
Given that there was a delay in the Optimism scaling solution there has been some concerns about ETH scaling. However, there are a number of other really important layer 2 solutions out there.
Polygon have developed a child chain architecture that leverages zkRollups and Optimistic rollups. Polygon childchains will be able to leverage the security, robustness, and network effects of the Ethereum blockchain.
Given that this is layer 2 it means that scaling can be done off of the main chain. As more Etheruem dApps start to integrate with Polygon it will mean less bloat on the main network.
🇬🇧 EIP 1559 & Proof of Stake 🇬🇧
This is a change in the way that the Ethereum Gas fee auction market works. It will see the implementation of a standardised “base fee” and an optional Tip that can be paid to speed up transactions.
Now, while EIP-1559 may not nessecarily reduce gas fees per se, it will make them more predictable and easier to use. You won’t need to adjust gas limits based on current market conditions as the Base fee will be dynamically adjusted.
Given that Miners are not a fan of EIP1559, they threatened to stage rebellion. This led to efforts by some in the ETH community to to hurry along the Proof of Stake merge. This would happen in Phase 1 which would mean that Ethereum could scale much quicker.
💸 Price Potential 💸
There are many factors that are price positive for ETH. These include both demand and supply factors:
- Increasing utility demand
- Increasing invesment demand
- Decreasing Exchange Supply
- More ETH in Defi Smart Contracts
- More ETH in the ETH 2.0 deposit contract
- potential impact of Fee burns
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📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.
#Ethereum #ETH #crypto #NFT #EIP1559 #trading #defi
Why Is Ethereum Worth Anything, Ethereum: Why ETH is So Valuable! My Predictions!! 🔮.
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