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The price of Ethereum hit a record high, to observe some trends on Ethereum from a data perspective.
2020 is a challenging year for everyone, and it is a year of positive development for Ethereum. In this article, let’s talk about some of the trends we have seen on Ethereum, including:
- Basic data
- Eth2 and Layer 2
- Bitcoin on Ethereum
For many people, price is the most important indicator. ETH has been rising throughout 2020, rising from US$129 to US$753 at the end of the year, a 4.8 times increase. At the time of writing this article, ETH has broken through its historical highs in 2021!
ETH has outperformed assets such as BTC, gold and S&P 500 in the past year. Its return rate at the end of 2020 is +483%, surpassing BTC’s +303%, while gold +24% and S&P’s return rate of +15% are even dwarfed.
Note: Although it is generally believed that encrypted assets are not closely related to other assets, the assets mentioned above all fell sharply in March 2020. At the end of 2020, ETH, BTC and S&P rose together, while gold remained sideways.
In 2020, the number of transfers on Ethereum has soared, from a historical high of 250 million in 2018 to 345 million, an increase of 38%. At that time, ERC20 token transfers accounted for only 35% of the total, but now it accounts for 54%. Ethereum is providing impetus for deeper and broader economic development!
The monthly transfer data in 2020 has always been on the rise, with the only exception being September when liquidity mining is in full swing.
Could it be that there are fewer liquidity providers?
Top 20 ERC20 token data for transfer:
- USDT ranks among the top again, with 28% of transfers done through it
- The overall proportion of stablecoins exceeds 35%, and 4 stablecoins (USDT, USDC, DAI, PAX) even entered the Top 6
- 6 tokens that have not updated their information on Etherscan also entered the Top 20, accounting for 2.8% of the total number of transfers
- One level lower than stablecoins is DEX tokens. The 4 DEX tokens UNI, BNT, KNC, ZRX account for 1.3% of the total number of transfers
The number of new addresses increased from 84 million in 2019 to 131 million in 2020, an increase of 56%.
The number of active addresses is on the rise in 2020, but the correlation with the price of ETH is not strong. The big drop in March was an exception, when many people were fleeing financial assets, while others took advantage of the ETH drop to buy bottoms.
Active addresses also fell in August and September
In 2020, due to the high demand for transfers on the Ethereum network, the total transfer costs incurred by it have been ranked first among all encrypted assets.
As the popularity of liquid mining decreased slightly, the gas price began to hover around 100Gwei. But if it is in US dollars, taking into account the increase in the price of ETH, the transfer fee is still rising. At the beginning of 2021, as the price of ETH skyrocketed, transfer fees in US dollars once again hit a record high.
In 2020, developers created a total of 10.7 million smart contracts, an increase of 55% compared to 6.9 million in 2019.
In the first half of 2020, the number of new smart contracts that have passed verification is stable. In the third quarter, it and DeFi and liquidity mining all showed significant growth. The number of verified single-day new smart contracts peaked in November, and then declined as the price of ETH rose.
Total lock-up value (TVL)
2020 is a breakthrough year for DeFi development. The TVL in these DApps has soared from USD 600 million at the beginning of 2020 to USD 15 billion at the end of the year, an increase of 24 times.
The market value of Top100’s DeFi tokens also rose from 1.6 billion US dollars to 19.8 billion US dollars, an increase of 11 times. When liquidity mining is in full swing, its market value accounts for up to 40% of ETH’s market value. Towards the end of the year, as ETH began to soar, the market value of DeFi tokens gradually declined.
Decentralized Exchange (DEX)
In December 2019, the total trading volume of DEX was US$166 million. In December 2020, the total trading volume of DEX reached 19.2 billion US dollars, an increase of 115 times!
Our article in February last year wrote about three DEXs on the market: Uniswap, IDEX and Kyber accounted for more than 80% of the total transaction volume. Ten months have passed, and the DEX market has undergone tremendous changes. Although Uniswap is still at the top of the list, the other two have fallen. Among the Top10 DEX, Sushiswap, Curve and Mooniswap will not exist before 2020!
4th place 0x Most of the transaction volume comes from Tokenlon
From the entire DEX market with a monthly trading volume of only $166 million, to Uniswap’s $420 million daily trading volume, beating Coinbase’s $348 million daily trading volume, it took only 8 months!
Stable coins account for 35% of the total amount of transfers on Ethereum. Their transfer volume is even more staggering. The transfer volume of USDT on Ethereum alone exceeds that of ETH. In 2020, the total amount of stable currency transfers exceeded US$1.2 trillion, an increase of 7 times from the 170 billion yuan in 2019.
In order to satisfy users’ demand for liquid mining tokens, the Ethereum browser Etherscan has listed nearly 500 related tokens on the page since the beginning of August. The transfer volume of these tokens peaked in September, but at the same time, the overall transfer volume and the number of active addresses on Ethereum are declining, indicating that the users participating in liquidity mining are only a small part of the Ethereum users.
Eth2 and Layer2
In 2020, the gas fee on Ethereum has soared, making users truly feel the importance of expansion. Although the expansion method has not yet been finalized, we have indeed seen some early results of expansion.
As of January 1, 2021, the number of pledged ETHs has reached 2.17 million, valued at $1.6 billion, accounting for 1.9% of the total ETH supply. It is expected that this number will rise further in the coming months.
One of Eth2’s main goals is to ensure that validators are more decentralized. So how has it performed so far? Based on the internal label of the address, we estimate that 51% of the pledged ETH is currently controlled by 20 entities, which is an increase of 9% compared to last month’s centralization. This data is of great reference value for future monitoring. For those who wish to pledge Eth2, please remember that the entire community needs more individual verifiers!
After the launch of the Eth2 beacon chain, the number of validators increased from the initial 27,500 to 67,000 within one month, which is almost 4 times the minimum number of validators (16,284) required for the initial start of the beacon chain!
Eth2 participation rate
How many of these verifiers are actually being verified? Since the ETH on the Medalla test network is worthless, the participation rate of Eth2 is very low. Community members firmly believe that the main network will not face the same problems. Facts have proved that they are right, and they are confident that since the launch of the mainnet, the participation rate has been as high as 96%.
Throughout 2020, Layer2 is mainly in the testing phase. Some online projects are also in the form of test versions, while projects that are not online have gone through multiple iterations. Among the projects that have been launched, the ETH deposited into Loopring and Tornada Cash is the most.
But for Layer 2, it is too early to make a conclusion. Competition will become more intense in 2021, and we look forward to seeing the development of Chain, Rollup, and DApp in the next year.
About Rollup, Vitalik published an article: Rollup Incomplete Guide.
Bitcoin on Ethereum
Total number of tokens
In 2020, the tokenized BTC on Ethereum also showed an upward trend, reaching 150,000 at the peak!
Just as Uniswap is always the king of DEX, wBTC is still the king of BTC tokens on Ethereum. Throughout 2020, the vast majority of BTC transactions on Ethereum are completed through wBTC, and renBTC lags a lot. The tokenized BTC trading volume peaked in September, reaching 1.4 million.
As of December 31, 2020, wBTC accounted for 81% of all tokenized BTC. In terms of token holders, there are 20,000 wBTC holders, ranking first, and the second highest imBTC holder is about 2,800.
Liquidity mining through tokenized BTC gradually became popular in the fourth quarter. The three new tokens, oBTC, vBTC and anyBTC, require users to lock BTC on the Bitcoin chain in order to obtain mining revenue. So far, the locked value of these three tokens is 25 million USD, accounting for less than 1% of the total value of tokenized BTC. But watching Ethereum siphon Bitcoin is a very interesting thing.
Non-homogeneous tokens (NFT)
NFT tokens have also made great progress in 2020. Although some projects have been transferred to Layer 2 or other blockchains, there are still nearly 5 million ERC721 transfers on Ethereum.
71% of them were completed by the top 10 tokens, including game tokens (Cryptokitties, Gods Unchained, Axie Infinity, Sorare & Dozer accounted for about 42%) and domain names (ENS & Unstoppable Domains accounted for about 19%).
Digital art is not listed above, but it is also very popular this year. Beeple raised $3.5 million by auctioning off his NFT artwork over the weekend. There are also some projects that provide a channel for funds to flow from DeFi into NFT, such as Rarible, which added liquidity mining to its governance token RARI.
New year forecast
The annual summary without some New Year predictions as Easter eggs, it would be very boring!
- Both EIP1559 and Eth2 phase will be launched in the third quarter
- More than 50 DApps will be migrated to Layer 2 and will be merged into 3 Rollups/chains before the end of the year
- NFT market size will increase by 10 times
- The transaction volume through MEV will exceed 100 million U.S. dollars
- Liquidity mining algorithm stablecoin will be hot in the first quarter
2020 is going so fast! With the vigor of Ethereum at the beginning of 2021, we expect that all these upward trends will continue in the future.
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