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Author | Hashpie – LucyCheng
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Ethereum 2.0, which has long been dubbed “there will always be eighteen months”, finally has a breakthrough new development in the last month. At the beginning of this month, the Ethereum Foundation officially opened the ETH pledge contract. The address finally successfully reached the minimum standard for the beacon chain within the effective pledge period. If there is no accident, ETH 2.0 Phase 0 will be officially launched on December 1.
Driven by these good news and Bitcoin’s surge, the price of Ethereum has been rising since November. At the same time, on-chain and off-chain data, including non-zero addresses, deposit contract pledge amount, large-value transfer transactions, and daily transaction volume, have shown a relatively obvious growth trend. In this article, Hashpie will analyze various data indicators of Ethereum and observe what preparations the field has done to meet ETH 2.0.
2. The price exceeded $600, setting a new high in 29 months
Last year, Ethereum welcomed 2019 at a price of 130 US dollars, and also ended 2019 at a price of 130 US dollars. Until this year, the market finally appeared in a different spring. The ETH price trend broke the sideways situation from the beginning of the year, and doubled to $267 from January to February. Although it quickly fell below $130, entering the third quarter, the price of Ethereum was pushed up again under the stimulation of the DeFi frenzy, rising to $471, and the cumulative increase in Q3 exceeded 108%.
The price rise and fall of Ethereum since 2017 (data source: Coinmarketcap)
By November 2020, under the influence of news of the U.S. election, the massive increase in institutional holdings, and the acceleration of the Ethereum 2.0 process, the cryptocurrency market is hot. This week, Bitcoin once again exceeded $19,000 and approached the historical high of $20,000. At the same time, other altcoins also showed a strong upward trend, achieving different levels of price growth. As one of the mainstream currencies, Ethereum rose more than 10% in seven days, second only to XRP (91.47%), ADA (25.03%) and BCH (15.11%).
Data source: Coinmarketcap; Deadline: November 25, 2020
According to data from Coinmarketcap, Ethereum broke through the $600 mark on November 24, a 29-month high. Even if the current price has fallen slightly, it has remained above $500, with a cumulative increase of nearly 30% in the month, which is better than the cumulative increase in the Bitcoin price this month.
3. The 19-day pledge broke 520,000, and ETH reached the deposit threshold as scheduled
The excellent performance of the Ethereum price promoted the completion of the minimum pledge threshold for the 2.0 startup founding block to a certain extent. On the day of the last effective pledge period on November 24, more than 300,000 ETH flowed into the deposit contract address, making the deposit progress of the beacon chain From 57% to 100% within 24 hours. On the same day, the price of Ethereum rose above $616, returning to the price level of June 2018, with a single-day increase of 4.9%.
ETH2.0 deposit contract address balance and Ethereum price growth (data source: OKLink, Coinmarketcap)
It is important to know that before November 23, the Ethereum 2.0 deposit address received only 286528 ETH, and the related pledge progress is less than half of the minimum activation threshold. Faced with such a slow pledge progress, on November 18th, the decentralized forecasting platform Ploymarket gave quite negative forecast data. 61% of investment forecasters in the relevant betting market believed that ETH 2.0 could not be launched as scheduled on December 1st. . On the same day, Danny Ryan, the head of the Ethereum 2.0 project, even publicly stated that if necessary, the minimum threshold of the deposit contract may be appropriately lowered to ensure the smooth launch of the ETH 2.0 founding block.
But approaching the final pledge period, as the price of Ethereum continues to rise, the market’s expectations for 2.0 are also rising, and the pledge tokens flowing into the deposit contract began to soar. At 10:20 am Beijing time on November 24 After reaching the minimum activation threshold, the balance of the contract address is still rising, and the amount of ETH pledge currently received has exceeded 700,000.
The growth of ETH2.0 deposit contract address balance (data source: OKLink)
In addition, it can be seen from the statistics of OKLink of OKLink that the balance growth process of the ETH 2.0 deposit contract address can be roughly divided into three stages, namely November 5th to November when the daily deposit amount is only a few thousand. On the 14th, the daily growth rate increased to around 10% from November 15th to November 19th, and the daily inflow reached tens of thousands or even hundreds of thousands of pieces from November 20th to November 24th.
From November 5th to November 26th, the amount of currency holdings is about 32ETH address growth (data source: Glassnode)
Since ETH 2.0 currently only has the limitation of the deposit function, these ETH pledged in the deposit contract need to be locked up for at least one to two years, waiting for the beacon chain Phase 2 to officially go online before it can resume circulation. For this reason, there are not many users who resolutely participate in deposit pledges in the first stage, and the growth of at least 32 ETH addresses has also declined slightly compared with the beginning of November (32 ETH is the lowest threshold for participating in the operation of validator nodes in Ethereum 2.0). In order to dispel users’ doubts, Vitalik Buterin took the lead in depositing his own 3200 ETH; however, this move did not work. At this stage, most users in the market were still cautious about participating in 2.0 deposit pledges.
One of the addresses of a large amount of capital injection ETH 2.0 deposit contract (data source: Etherscan)
This state continued until around November 14. With the increase in the price of Ethereum and the addition of the whale address, the daily growth rate of the balance of its contract address gradually increased to more than 10%. From the transfer information tracked on the blockchain information website Etherscan, it can be seen that between November 14 and November 20, nearly 30,000 Ethereum from the beginning of 0x62, 0x38, 0xdD and other giant whale addresses flowed into deposits The contract occupies more than half of the amount deposited in the contract address during the period.
Although the participation of the giant whale address has accelerated the deposit pledge process, as of November 20, the deposit contract address received only 120,000 ETH, which is less than a quarter of the minimum standard of 524288 ETH. According to the growth rate at that time, the deposit contract will not reach the minimum pledge threshold until at least December 6. However, this situation did not occur. Starting from November 21, the balance of the Ethereum deposit contract address has shown an exponential growth trend, enabling it to complete the remaining nearly three-quarters of the deposit progress on the last effective pledge period. . Judging from the lock-in amount of 131,300 ETH deposit contracts given by the Swiss crypto asset distributor Bitcoin Suisse, we have reason to speculate that the ETH that flows into the deposit contract in the third stage mainly comes from institutional supporters.
4. Large transfers occur frequently, and over 10% of the mortgage funds come from the address of the giant whale
As mentioned above, Ethereum can complete the minimum pledge of the 2.0 startup genesis block, and it is indispensable for the huge address. The three Ethereum giant whales analyzed by Bison Trails protocol expert Viktor Bunin alone deposited 17088 ETH, 5504 ETH and 5024 ETH into the deposit contract, which accounted for more than 5% of the activation threshold of 524288 ETH.
The basic situation of large transfers of Ethereum during November (data source: Whalealert)
On the other hand, according to statistics from Whalealert, it can also be seen that during the growth of the balance of the ETH 2.0 deposit contract address, the growth rate has begun to accelerate, and the number of large-value transfer transactions on the chain and the number of related transfer amounts have significantly increased. Among them, on November 21, when 50,000 ETH pledge deposits were obtained in a single day, there were more than 15 large-value transfer transactions between addresses with an amount of up to 60,000 ETH; on November 14, the single-day ETH 2.0 pledge deposits increased from 1,000 On the day when the coin increased to 10,000, there were about 5 large transfer transactions between addresses with an amount of 50,000 ETH.
The number of transactions on the Ethereum chain during November (data source: Coin Metrics)
After successfully meeting the standard, the Ethereum network began to decrease in large-value transfer transactions during the year. At the same time, the number of transactions on the 24-hour chain also declined, returning to the level of early November. Not only that, after reaching the 2.0 minimum activation threshold, the transaction type of large-value transfers on the Ethereum chain has gradually changed from transfers between addresses and exchange expenditures to large-value exchange deposit transfers, and in the past seven days, Ethereum holds currency. The amount showed an inflow status, and the balance increased by more than 270,000 Ethereum during the week (data source: ViewBase).
5. Trading in the secondary market is hot, and the mining market is stagnant
If nothing happens, the mainnet of the Ethereum beacon chain will be launched on time, and the 2.0 founding block will be dug out on December 1. The recent breakthrough new developments of the 2.0 network and the rebound in the market have given Ethereum an upward momentum. After its price exceeded the $600 mark, the selling pressure behind the market also increased sharply.
Ethereum price and transaction volume changes in November (data source: Coinmarketcap)
According to indicators released by crypto analysis company Into TheBlock, between $531 and $547, 499,000 addresses purchased a total of 6.43 million ETH. From the data given by Coinmarketcap, it can be calculated that the average daily transaction volume of Ethereum from November 21 to November 25 was US$6.564 billion, an increase of more than 20% from the previous month; until November 26, the price of ETH fell to US$520. Below, its 24-hour trading volume has only dropped to a level of about 580,000 US dollars, but compared with the beginning of the month, it has also shown more than 30% increase in trading volume.
SOPR ratio developed by Renato Shirakashi (Data source: Glassnode)
Although the price of Ethereum has fallen sharply with Bitcoin in the past two days, other market data still show more optimistic mood on the floor. For example, SOPR (Expenditure/Output Profit Rate), an indicator that can be used to measure people’s emotions and behavior, is still at a level above 1, indicating that the market as a whole is still in a profitable state. It is worth mentioning that the advancement of the ETH 2.0 process has attracted more small investors to enter the market to a certain extent. By comparing the growth of addresses with ETH holdings greater than 0.1 and 0.01, it is not difficult to find that since November 15th, the number of addresses with address balances greater than 0.01 and less than 0.1 has increased significantly. This side shows that this month’s growth of 1.3 million non-zero addresses , There are many new influx of small investors.
In the past three months, the growth of Ethereum holdings greater than 0.01 and 0.1 addresses (data source: Glassnode)
Not only that, but Ethereum mining revenue and mining difficulty also increased this month. Data from BitinfoCharts pointed out that the current Ethereum mining difficulty is 3.5185 PH, a new high in the past two years, and is gradually approaching the highest point in history. However, with the increase in mining difficulty, the growth rate of Ethereum’s entire network’s computing power began to slow. In November, the cumulative computing power growth was only 3.3%, and the growth rate fell by more than 49% from the previous month.
Ethereum’s mining revenue over the years (data source: BitinfoCharts)
6. Consensus and differences in the community, the market only pays attention to price trends
Near the start of the beacon chain, the industry’s attention to Ethereum is extremely high, and various market indicators have shown a relatively strong growth momentum. But from the standpoints and perspectives of participants such as institutions, miners, retail investors, giant whales, and founding teams, there seem to be many contradictions and differences between them.
The Baidu search index of Ethereum in the past year (data source: Baidu Index)
For institutional investors and giant whale users who are optimistic about Ethereum 2.0, participating in Phase 0 deposit pledge is a good long-term investment. Driven by them, more small investors have begun to relax their vigilance and enter the market one after another, trying to become the first beneficiaries of Ethereum’s transition to the PoS mechanism. Perhaps for this part of the participants, what ETH 2.0 is and how its specific route planning has only recently been included in the concept of understanding, but for old miners and community participants, this is a long and controversial topic.
So far, the debate in the community about the future of ETH miners and whether the Ethereum network should switch to PoS for scalability is still unsolved. At the same time, doubts about whether Phase 2 can be launched as scheduled and whether the pledged tokens of Phase 0 can resume circulation, etc., have not ceased. However, these differences seem to have not cooled the market’s enthusiasm for Ethereum 2.0. The field’s expectation for the upcoming beacon chain is still high. Currently, the amount of ETH pledged by Phase 0 deposits reaches 746,304, which is 1.42 times the original goal. The number of verification nodes for 2.0 rose to 18,752, and continued to increase at a rate of about 5%.
Hashpie believes that although the recent surge in the price of Ethereum cannot be directly linked to the new progress of ETH 2.0, it can be observed that the minimum pledge threshold for the start of the beacon chain can be successfully completed, which is more or less affected by the price. Driven by the rebound in the market and the address of the giant whale, the field’s confidence in Ethereum 2.0 has continued to increase, and the market has shown an optimistic mood.
However, this state may not last for a long time. The ETH currently optimistic about and participating in Phase 0 deposit pledge only accounts for less than 2% of the total market circulation. Moreover, the launch of the founding block of the beacon chain on December 1 is only the beginning of Ethereum 2.0. To truly prove that the network is feasible, it will have to wait until the subsequent sharding technology goes online and the recirculation of pledged ETH. In the face of the Ethereum 2.0 process with serious delays and many unknowns in the technology, the community has no lack of despising voices; and for retail investors who follow the wave, patience may gradually wear off in several years of updates.