Ethereum is more than just a cryptocurrency asset. It’s a whole digital economy and an ecosystem. Recent research has shown that the stable coin value transmission has now turned the ETH in its network.
According to the crypto research company Messari, ERC-20 stablecoins in 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 root causes of this shift in the USDT transition to Ethereum. Overall, this has resulted in the stabilization of the Ethereum economy and a reduction in the volatility associated with other digital assets such as Bitcoin.
1 / The transfer value of stablecoin has now turned the ETH to Ethereum pic.twitter.com/wwlNF2ObOV
pic.twitter.com/wwlNF2ObOV– Ryan Watkins (@RyanWatkins_) January 29, 2020
Of course, ETH prices themselves remain volatile, but the more of them are included in decentralized financing (DeFi) and the more stable the Ethereum-based coins are, the more the digital economy will stabilize.
Investors don’t want to spend Bitcoin right now because they fear losing if prices soar. The “Hodl” mentality has been clear since the last big rally. Ethereum, on the other hand, can be used for other purposes like DeFi markets, smart contracts, dApps, non-fungible tokens, etc.
Define Ethereum
In the latest issue of Bankless, David Hoffman describes Ethereum as more of a financial landscape than a place where things live, grow and interact with others.
Stablecoins are just one of Ethereum’s many uses and add value to the network.
Many believe that Bitcoin still has some way to go before it can be considered a unit of account. This is the case when goods and services are offered in bitcoin or smaller satoshi units. There is still a long way to go due to the massive price volatility that is a huge draw for day traders and speculators.
Ethereum is inherently closer to this status as an economy rather than a single tradable asset. The explosion in DeFi markets last year is evidence of that.
Definitely DeFi
Hoffman goes on to add that the ETH locked in DeFi is a proxy for how much bandwidth Ethereum fires (self-sustaining systems) are consuming. According to DeFi Pulse, this number continues to reach new highs with currently 3.2 million ETH.
Since the same time last year, that number 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 developing into a stable financial ecosystem rather than a speculative instrument.
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