Ethereum Ecosystem
Ethereum is a technology for building apps and transactions, holding assets, transacting, and connecting without being controlled by a central authority.
Ethereum is built in such a way that it has its digital currency (cryptocurreny) called 'ether' which is used to pay for certain activities on the network.
What is the Ethereum technology use case
- Banking services: with access to Ethereum you can access products built on it which can be used for lending, borrowing & savings.
- Peer-to-peer network: Ethereum allows you to move your money, and make agreements without an intermediary.
- Censorship resistant: Ethereum is not controlled by the government or any central body.
With a shared global state, all the products on Ethereum are compostable.
Ethereum as a Layer 1
Layer 1 is the base blockchain, a good example is Ethereum and blockchain, we can call both layer 1 blockchains because they are the underlying foundation that various layer 2 networks build on top of.
What is layer 2
Layer 2 (L2) use a collective term describing a specific set of Ethereum scaling structure. Layer 2 is a separate blockchain that extends Ethereum and inherits the securities guarantees of Ethereum.
Layer 2 can be divided into 2; roll-up and the lightning network on top of Bitcoin.
Types of rollups: Optimistic roll-ups & Zero-knowledge rollups (ZK rollups)
- Optimistic rollups: they are optimistic in the sense that transactions are assured to be valid, but can be challenged if necessary e.g Optimism, Arbitrum.
- Zero-knowledge rollups: zero-knowledge rollups are validity-proof transactions computed off-chain, and then the compressed data are supplied to the Ethereum main net as proof of their validity. e.g Zksync, Starknet
Ethereum blockchain products
The blockchain is used to build decentralized apps that cut across different categories like Finance, Art & collectibles, gaming, and technology.
For Defi;
Decentralized exchanges -Uniswap
Money markets - Compound Finance
Prediction market - a polymath
Investment - Token sets
Payment - Turnado cash
Insurance - Nexus mutual
Portfolio management - zapper
For art and collectibles;
Digital art and fashion: foundation
Music: Audius
Digital collectibles: OpenSea
For gaming;
Virtual world - Cryptovexels
Competition - Axie infinity
Technology;
Utilities - ENS
Marketplace: Bitcoin
Developer tools - Golem
Browser - brave
ANALYTICAL METRICS
The project built on Ethereum 3,986
Account (wallets) with ETH balance 71m+
Smart contract on Ethereum 50.5m
The value moved through the Ethereum network in 2021 - $11.6T
Ethereum price $1, 777
Value locked in $52.72b
Number of nodes 11,900
Protocols 719
Active users 409,656
Defi protocols & categories built on Ethereum
CDP - MakerDao
Liquid staking - coin base wrapping & rocket pool
Services- Instadapps
Yield - Aura
Derivatives - did
Insurance - Nexus mutual
Indexes - set protocol
RWA - Ondo finance
TOKENOMICS
Market cap $219b
Circulating supply -120,451,125
Total supply - 120,45, 125
Maximum supply - infinity
83.33% is allocated for the networks crowd sale
- 16.68% allocated to the Ethereum Foundation, early contributors, and others.
Final thoughts (Conclusion)
Ethereum is the second largest cryptocurrency by market cap, most of the innovations we have today in Defi, NFTs, Stablecoin, and permissionless payment were built on Ethereum. With the above metrics and summary analysis, you can tell why Ethereum has such large number of market cap and why it will keep increasing over time
I call it an open-source permissionless technology.
If you are looking to invest in Crypto for a long period, you should consider the Ethereum blockchain.
The founder and a few of the team are doxxed, with a good track record of product improvment, good tokenomics and a constant revenue generation from transaction fees.
For me, Ethereum will keep growing and improving!!
