Ethereum price stuck below $250, DeFi-induced accumulation?

Sunday 9 August 2020, 9:19 PM AEST - 2 days ago

Ethereum ETHImage Courtesy of Wall Paper Flare

While the Ethereum price stagnates, the value of its tokens continues to rise.

A recent finding showed that the total value of the top five valuable tokens is higher than ETHs. This is a weird situation where the value of its ecosystem is higher than the protocol.

The fat protocol thesis

It is everything against the Fat Protocol Thesis forwarded by Joel Monegro in August 2016. He stated that the value of a smart contracting protocol will grow at a faster pace than the value of applications built on it.

Disapproved, the development will bring into question talks about Ethereum security and undoubtedly, the Economic Abstraction question. This stems from the parasitic nature of Ethereum-based dApps. Though useful and driving adoption, they technically dont draw value to ETH but rather to their respective tokens.

Still, Raoul Paul, a former Goldman Sachs executive sees value in Ethereum at a time when BTC flat-lines, and Ethereum tokens like Link bloom.

Ethereum likely to outperform Bitcoin because of DeFi

In Pals assessment, there is a strong likelihood of ETH outperforming Bitcoin in the long-term. He zeros in on DeFi, stating that the growth of this ecosystem will pump the Ethereum price in the next bull cycle. In a newsletter, he notes:

I am getting increasingly bullish on Ethereum. ETH is the silver to Bitcoins gold. It has more industry uses and less store of value uses… ETH is all about adoption rates and usage. Basically, its all down to something called DeFi.

And the ETH/BTC cross looks like ETH is going to be the outperformed initially…

— Raoul Pal (@RaoulGMI) July 8, 2020

Ethereum price analysis

At the time of writing, the Ethereum price is stable. There are no meaningful gains or ...

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