BKEX Institute Annual Strategy Report—Eth

The value of BTC lies in storage, while the worth of ETH lies in usage. As a global computer, the worth of ETH is reflected in how many DAPPs are deployed on it and how many users use them. It is not just the transfer that generates a transaction record. (As you can see on etherscan: not every transaction is a transfer, but many are smart contract function calls. For example, casting, authorization, etc.).

Therefore, the daily transaction volume on the ETH chain (blue) can directly reflect the activity of the ecology on the ETH chain.

We can see that the number of transactions on ETH has a clear growth trend. And the number of on-chain transactions rising first is an excellent leading indicator before the mini-bull market in 2019 and the big bull market price spike in 2021. On-chain trading activity has been high since the current bull market and has not significantly declined due to the bear market. This is different from 2018. This is also the most decisive proof that ETH has moved from the concept hype to the application phase.

In summary, the value of ETH is closely related to applications. The price has plummeted without a significant drop in on-chain activity. Moreover, the transaction size at the peak of the bull market fever in 2018 is now the norm. The current price is still below the peak of the 2018 bull market.

In addition, every data interaction on ETH consumes a certain amount of ETH as a gas fee. At the bull market's peak, the amount of ETH gas can exceed $100 million a day, and after the EIP-1559 upgrade, the base fee in the gas fee (roughly 80% of the gas fee) is destroyed. This also dramatically reduces the inflation rate of ETH.


And ETH has been in the absolute dominant position among many public chains. Take the DEFI board as an example. ETH's on-chain volume occupies more than half of the whole network year-round. And it can maintain a relatively high percentage regardless of bulls and bears.

Public chain technology is the cornerstone of all ideas in the blockchain industry. And ETH is still the most advantageous one in the public chain track.


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