“Flippening” took place in the Ethereum blockchain. Data from the Coin Metrics report released this week showed that the number of ERC-20 transactions exceeded the ETH's trading volume for the first time. Although these tokens are very popular, they may be giving way to new non-interchangeable tokens.
What does this mean?
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The surge in trading of these smart contract tokens may prove that the Ethereum network has finally found a foothold among many users, which can be proved by various practical use cases.
ERC-20 specification creates "removable" tokens
The Coin Metrics report by analyst Nate Maddrey borrows the word "flippening" – originally created to describe the cryptocurrency that exceeds Bitcoin in market capitalization – and now uses the "trade flapping" of the Ethereum network itself. .
Maddrey reviewed the creation of the ERC-20 specification – used to create tokens that are compatible with Ethereum. Because the creation of such tokens is too simple, which led to the excessive prosperity of the ICO, the single ERC-20 token also created the value of the network – resulting in an incredible competition.
In fact, according to Investopedia, as of April this year, the number of ERC-20 tokens in the Ethereum blockchain has exceeded 18,1800.
The Coin Metrics report divides these tokens into three categories—application tokens, which allow holders to get services, such as being able to bet in the forecasting market Gnosis; exchange tokens, such as the currency of BNB (it later from the ether The workshop moved to the blockchain of the currency itself; there are also some favorite stable coins, such as Tether and DAI.
According to the report, since the middle of 2018, the biggest contributor to the number of Ethereum transactions is the stable currency, especially Tether. The report states:
“The USDT transaction has grown since May and currently accounts for more than 80% of the top ten token transactions.”
Flippening is just getting started
All of these ERC-20-based token transactions have slowly surpassed ETH-based transactions.
The report states:
“As of November 10, the daily trading volume of ERC-20 was approximately 303,000, while the daily trading volume of ETH was approximately 290,000.”
In addition, the power of non-replaceable tokens (NFT) cannot be underestimated. The report states:
“Although ERC-20 is the dominant token type to date, we may be at the forefront of the rise of ERC-721.”
The typical representative of the NFT is the encrypted cat that has been used throughout the entire network.
Coin Metrics noted that since the beginning of the year, the number of ERC-721 contracts has increased by nearly 350%, while the number of ERC-21 contracts and non-token contracts has increased by about 39% and 36%, respectively.
However, Ethereum is not out of the woods. Starting with crypto cats, this blockchain network has struggled to meet trading needs. The network is currently being migrated to Ethereum 2.0 to increase operational speed and scalability.