In its latest research report, " Entering Ethereum, " Delphi Digital outlines and analyzes the short-term and long-term sustainability of Ethereum in future upgrades and fierce competition.
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According to this report, “Ethernet 2.0”, the “Serenity” upgrade update is expected to be completed in 2021 (estimated). This new update will enable PoS and sharding on the Ethereum network to increase scalability and reduce transaction costs. While other platforms such as EOS, Cardano (ADA) and Wave (Tron) offer faster transactions and scalable "smart contracts." However, in the field of encryption, Ethereum's market capitalization and popularity are still leading.
Ethereum is the second largest cryptocurrency in the world. Ethereum accounted for 10.1% of the market value of the entire cryptocurrency market on April 21, 2019.
Decentralized Finance (DeFi) on Ethereum
DeFi is a new interoperable financial system designed to build a ubiquitous financial product based on blockchain and smart contracts.
"As of March 3, 2019, more than 2 million ETHs were bet on DeFi applications."
However, research has also shown that MakerDAO accounts for 98% of Ethereum in all current DeFi systems. Therefore, if DeFi gains considerable momentum, then a higher Ethereum bet is expected to open. DeFi provides a financial system that anyone can access via the Internet.
With the end of the ICO era, Ethereum for new tokens is expected to open in 2019. In addition, approximately 275,000 ETHs per month are used to promote the development of the DeFi ecosystem, and this demand is expected to increase over time. However, the miners are currently issuing new coins every two minutes. Therefore, the selling pressure is greater than the buying pressure. In 2017, Ethereum ICO detonated the bull market, and now DeFi will become the "next" bull market explosion?
Correlation between encrypted assets
Delphi Digital statistics also confirm that these crypto assets are currently significantly associated with Bitcoin. This trend began shortly after the start of the bear market. According to the report, the price movements of Bitcoin and Ethereum have been strongly correlated over the past 12 months.
The report also includes:
“Given the extremely high internal correlations we have discussed before, this is a trend we are closely watching, because ETH may perform better if the BTC rebounds.”
It's worth noting that Bitfinex's long/short ratio hit an extremely low in December last year, and then ETH rose from $85 to $150. In addition, long-to-short positions have reached a five-month high.
Long-term focus of Ethereum 2.0 development
Delphi Digital conducted a comprehensive study of the Ethereum 2.0 program. According to their analysis, although the newly proposed mechanism will reduce the handling fee and accommodate more projects, due to the current “gas cost”, there are many obstacles to entering the market.
In addition, such a PoS network necessarily requires a large number of users on the platform. The study adds:
“Diversified and profitable validator networks are critical to the security and longevity of the Ethereum network, but if you do not charge a significant network fee, this is not possible with the currently proposed parameters. At the same time, the expansion of network costs will only be accompanied by a significant increase in dapp and widespread adoption, and it is hard to imagine building on a network that is considered unsafe."
The price analysis for this study also shows that although Ethereum has entered the overbought area. However, after Ethereum reached this level in the past, it has maintained the bull market momentum for many times.
Finally, the report also includes the Dapp report and comparison with the EOS platform.
The report mentions that more than 2,000 Dapps have been developed on Ethereum and EOS. However, their use is still complex and needs improvement.