Ethereum Fundamentals Looking Rosy Despite Downturn; DeFi and Developers
Ethereum has gone from “hype and ICOs” in 2017, to the “home of decentralized finance” in 2019, according to the blockchain analysts at Weiss Ratings. Indeed, the list of decentralized services available to internet users of Ethereum is extensive, and encompasses more than one could find at a local bank (more below).
Meanwhile, a recent developer report by Electric Capital places Ethereum as the most highly developed blockchain project in existence. With four times the number of developers as Bitcoin, and a whopping 18% of all open-source crypto developers in existence, can anything else match Ethereum’s strength in numbers?
Ethereum: Home of Decentralized Finance?
According to Weiss Ratings, Ethereum is a different beast now to the one we saw just a couple of years ago. From hype and ICOs to… decentralized banking for all? Weiss Ratings tweeted:
“ETH has gone from hype and ICOs in 2017 to the home of DeFi in 2019. DeFi is the best application for public open blockchains that we’ve seen. It’s going to be really hard for any smart contract platform to compete with ETH, now that it has DeFi.”
DeFi refers to decentralized finance, and is represented by the plethora of economic services available to every day internet users. On Ethereum alone, there currently exist tools for derivatives trading, asset management, decentralized exchanges, margin trading, decentralized insurance platforms, decentralized lending/borrowing, asset tokenization, prediction markets, stablecoins and more.
Bear in mind that Ethereum was never envisioned as a mere cryptocurrency. By the time of Ethereum’s invention, there had already been a hundred Bitcoin imitators. Ethereum had loftier starting ambitions – one of a decentralized internet, or worldwide supercomputer. The services mentioned above won’t be all Ethereum produces in its existence, but right now they are more than the services offered to me by my local bank. Check out this huge list of DeFi services on Ethereum for a clearer picture.
Home to Developers
Meanwhile, a recent blockchain developer analysis by Electric Capital revealed Ethereum to be the most highly developed blockchain ecosystem in existence.
The report states that 18% of all open-source developers working in blockchain are working on Ethereum. And the headline grabber: Ethereum has four times more developers than the next biggest crypto ecosystem – that being Bitcoin.
Given the number of tokens which use Ethereum as their foundation, this is hardly surprising. Here we stumble upon the dividing line between Ethereum’s past and its future. We might expect that the majority of these developers belong to ICO “shitcoins”, but Electric Capital’s data suggests the opposite.
Of all developers working in the crypto space, 50% of them work on projects within the market cap top 100. That means the other 50% of devs are scattered across the rest of CoinMarketCap’s 2,475 cryptocurrencies – and perhaps many more given that not all projects make it to CoinMarketCap.
With 18% of total blockchain devs working on Ethereum, one assumes there must be large crossover. In terms of long-term fundamental indicators, it’s difficult to think of many better.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.