Ethereum has certainly made a splash in the crypto world, but its future growth is still a bit of a mystery, especially when it comes to new decentralized applications (dApps). According to a recent Coinshares report, Ethereum's role in the crypto universe is largely anchored by two big players: marketplaces and stablecoins.
Right now, Ethereum is riding high on the success of decentralized finance (DeFi) protocols and the booming stablecoin market. These elements make up just over half of the network's current use cases, painting Ethereum as the backbone for many crypto projects.
The report, which came out on September 24, shines a spotlight on how marketplaces like decentralized exchanges (DEXs) and Non-Fungible Token (NFT) platforms have solidified Ethereum’s position as the go-to blockchain for tokenized assets. Take Uniswap, for example—it alone accounted for at least 15% of transaction fees on Ethereum in the first half of 2024! And let’s not forget OpenSea, the NFT marketplace that was once a major fee generator, even though its star has dimmed a bit since its $572 million peak in the first half of 2022.
And then there are the stablecoins. With more than $135 billion worth of stablecoins like Tether (USDT) and USD Coin (USDC) circulating on Ethereum, it's clear these digital dollars are adding serious liquidity to DeFi platforms and making cross-border payments a breeze.
But here’s the kicker: what’s next for Ethereum? Despite some impressive upgrades, including a shift to Proof-of-Stake (PoS) and the development of Layer 2 (L2) scaling solutions, the future of new dApps is still pretty foggy. Analysts are hopeful, but the demand for fresh innovations remains to be seen.
CoinShares hints that Ethereum’s future success might depend on breaking out of its current mold. The network has potential in areas like enterprise adoption, gaming, and the metaverse, but real-world demand and practical implementation are crucial. Ethereum needs to woo developers to stretch the limits of blockchain tech in everyday life.
James Butterfill, the head of research at CoinShares, summed it up well: the value of ETH is driven mainly by the demand for Ethereum transactions—basically, how much users are willing to pay for services on the network. Most transaction fees come from a “very small set of services,” which are largely speculative or simple value transfers. Butterfill suggests that for Ethereum to secure its long-term value, it needs to focus on building “sustainable on-chain utility.”
So, while Ethereum has already proven itself, the real adventure lies in what it can achieve next!
