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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”.
The DeFi craze
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.
The post Ethereum accounts for 51% of value held on the blockchain appeared first on Coin Journal.
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