Ethereum is more than just a cryptocurrency-asset; it is an entire digital economy and ecosystem. Recent research has found that stablecoin value transfer has now flipped ETH on its network.
According to the crypto-research firm Messari, ERC-20 stablecoins on the Ethereum network have now overtaken ETH itself in terms of the adjusted transfer value.
More Stability For Ethereum
Researcher Ryan Watkins breaks down the primary causes for this shift of USDT transitioning to Ethereum. This has had the overall effect of stabilizing the Ethereum economy and reducing the volatility that is associated with other digital assets such as Bitcoin.
1/ Stablecoin transfer value has now flipped ETH on Ethereum
pic.twitter.com/wwlNF2ObOV
— Ryan Watkins (@RyanWatkins_) January 29, 2020
Naturally, ETH prices themselves remain volatile but the more of it that is locked up in decentralized finance (DeFi), and the more stablecoins that are based on Ethereum, the more the digital economy will be stabilized.
Investors currently do not want to spend Bitcoin for the fear of losing out if prices skyrocket; the ‘hodl’ mentality has been clear since the last huge rally. Ethereum, on the other hand, can be used for other purposes such as DeFi markets, smart contracts, dApps, non-fungible tokens, etc.
Defining Ethereum
In the latest edition of ‘Bankless’, David Hoffman describes Ethereum as more of a financial landscape, a place where things live, grow, and interact with others.
Stablecoins are just one of the many applications that Ethereum has, and they add value to the network.
Many feel that Bitcoin still has some ways to go before it can be considered a unit of account. This is when goods and services are priced in Bitcoin or smaller satoshi units. It is still a very long way off due to its massive price volatility, which is a big pull for day traders and speculators.
Ethereum is closer to that status by its nature as an economy rather than a single tradable asset. The explosion in the DeFi markets over the past year is a testament to this.
Definitely DeFi
Hoffman continues, adding that ETH locked in DeFi is a proxy for how much bandwidth Ethereum ‘fires’ (self-perpetuating systems) are consuming. That figure continues to reach new highs with the total currently at 3.2 million ETH according to DeFi Pulse.
Since the same time last year, that figure has risen 60% while ETH prices themselves are still in the depths of a two-year bear market.
This is a strong indication that Ethereum is evolving into a stable financial ecosystem rather than a vehicle for speculation.
The post How Ethereum’s Economy is Now Dominated by Stable Value Transfer appeared first on BeInCrypto.
