Ethereum’s number of daily transactions is almost five times that of Bitcoin.
Volumes at DeFi, especially NFT, have grown tremendously this year.
Although the market capitalization of bitcoin (BTC) has dominated the cryptocurrency market since its inception, its dominance has declined markedly so far this year. ETH has appreciated this year 404%, compared to a 121% appreciation of BTC. These trends have fueled the discussion about the possibility that ETH will dispute the leadership of BTC, as the second cryptocurrency approaches 50% of the market value of bitcoin.
But, beyond market value, another important benchmark emerges between these two important networks, especially because of Ethereum’s prominent role as the dominant ecosystem for decentralized finance (DeFi), utility tokens, and more recently, for non-tokens. expendable or NFT.
In terms of daily transactions, Ethereum’s superiority is notorious. The following graph shows that Ethereum surpassed Bitcoin in the number of transactions at the beginning of July 2017, to reach an all-time high in May of this year.
Although the transactions of both networks have decreased since May of this year, as of September 2, 1.16 million transactions were registered in Ethereum and 244,953 transactions in Bitcoin. That is, Ethereum almost five times in transactions to Bitcoin.
Regarding the value transferred in both networks, in the last three months similar volumes have been registered around USD 10 billion a day, while, last May, Ethereum tripled Bitcoin in the amount of daily transactions, reaching a maximum of USD 35,000 million (average of transactions in 7 days), as can be seen in the following graph.
The sustained increase in Ethereum transactions may be related to the increasing popularity of NFTs, as well as the increasing use of decentralized finance platforms (DeFi), as detailed later in the article. On the other hand, the decrease in activity on the bitcoin network could be due to the increasing accumulation of BTC by holders long term.
The activity of the Bitcoin network has been declining despite the recent appreciation of its price spot, not only in transactions and in volume; There has also been a drop in the volume of derivatives, as seen in the following chart of monthly futures volume.
From the maximum of USD 2.56 trillion of futures volume in May of this year, the average of the last 3 months is USD 1.76 trillion, that is to say a 30% decrease.
DeFi activity gives Ethereum an edge
Much of the superiority in the number of Ethereum transactions comes from the increasing activity in DeFi and NFTs. Total volume locked in DeFi is approaching $ 100,000 million, according to DeFi Pulse, while the blocked ETH reaches 4.74 million this September 3. BTC blocked on DeFi platforms reached 202,564 BTC.
The growth of blocked ETH could come from the rise of lending platforms such as Defi, Aave, InstaDApp and Compound. These are the main lending platforms, which are among the top four DeFi platforms. These three applications represent 71% of blocked ETH.
According to DappRadar, Ethereum remains the dominant blockchain in DeFi, in terms of locked value. However, in the second quarter of 2021, that network faced significant challenges from the Binance Smart Chain (BSC) and Polygon. This latest blockchain now partly hosts the important applications Aave and Curve, first and third DeFi platform in locked value, respectively.
The following graph from Dune Analytics shows the increasing trend of activity in DeFi in the last three months, despite the drop from May.
Boost of NFTs in Ethereum
The growth in the volume of non-fungible tokens traded has been explosive. In the month of August, the volume traded in NFT grew to USD 5,290 million, a 315% increase month by month, as shown in the following graph, and 1,103% compared to June.
According to DappRadar, the total market value of NFT tokens on Ethereum is $ 14.27 billion. With this assessment, the NFT market equates to the capitalization value of litecoin (LTC), in the 12th position of the cryptocurrencies with the highest market capitalization, according to CoinMarketCap, and would be above chainlink (LINK) and bitcoin cash (BCH).
In relation to NFTs, games in the category called Play-to-Earn, among which Axie Infinity stands out. This recorded last August the record of 1 million active players per day, a fact reported by CriptoNoticias. In the last week, 128,000 traders they exchanged game tokens for a total of $ 146,272 million, according to DappRadar.
Faced with a low activity of the Bitcoin network, despite a moderate rebound in the price of BTC, Ethereum is perceived with greater dynamism, both due to its appreciation in the market, and due to growing activities focused on decentralized applications.
While bitcoin has been lateralizing below $ 50,000 in the last two weeks, ETH posted a 25% boost in the last 4 days to break above $ 4,000 this Friday the 3rd. In the last few hours, its price has fallen back and is at $ 3,940 at the time of writing, as can be seen in the CriptoNoticias price calculator.
Bitcoin has a clear role in front of investors, and it is to be considered as a store of value. Ethereum and ether (ETH), its native cryptocurrency, on the other hand, due to the various functions of this network, is seen under five different narratives, according to a study by Electric Capital, published by CriptoNoticias. Among them, Ethereum stands out as a digital nation and as a payment network and the consideration of ETH as a productive financial asset.