By
Godfrey Benjamin
April 25th, 2024
It’s a period of good news for Ethereum around its anniversary. Even its futures market is experiencing an unprecedented boost in July.
The Ethereum token, Ether (ETH), is trading above $340 on Coinbase as the platform continues to gain attention as the most prominent smart contract blockchain. Ethereum is celebrating its fifth anniversary this July and this has coincided with a period in which the price of the token rose by 50% within a month.
The digital currency traded at $225.5 at the beginning of the month and is closing the month of July at $340 according to data from Coinmarketcap.
DeFi and Ethereum 2.0
Analysts are of the opinion that the success of Ethereum which has morphed to demand for its token is traceable to the rise in popularity of decentralized finance (DeFi) and the imminent launch of Ethereum 2.0.
According to a report by analysts in the DeFi space, DeFiPulse.com, the commencement of the yield farm system by Compound, a popular DeFi platform was responsible for the high demand of Ether as other DeFi platforms were launched subsequently, effectively raising the demand for gas on the Ethereum network.
The yield farming concept is responsible for the influx of Ethereum users to these decentralized finance platforms with the hope to make profit. Presently, several of these platforms have been launched with ether valued at $482 million, $291 million and $263 million locked in the most prominent DeFi networks Waves, Balancer and Curve Network respectively. The report says that the total value of funds locked up in these platforms since the beginning of June has tripled and presently valued at $3.94 billion.
Good News from Ethereum around Its Anniversary
However, the Ethereum co-founder Vitalik Buterin isn’t impressed with the concept of yield farming. According to a comment made by him at “Unchained Podcast” on July 29, he is not very optimistic about it:
“And those guys are not going to just keep on printing coins for people to, to entice people, to get into their ecosystems forever. It’s a short-term thing. And once the enticements disappear, you can easily see the yield rates drop back down to 0%.”
The second catalyst responsible for the high demand of ether is Ethereum 2.0, the project that intends to scale the network through migration to proof-of-stake. This would incentivize users to staking their Ether while increasing ETH transactions. The final testnet for the consensus called Medalla is planned for launch in August.
It’s a period of all-round good news for Ethereum around its anniversary. Even its futures market is experiencing an unprecedented boost with record-high contracts made in July.