Experts believe Ethereum’s upgrades can make it a long-term store of value like Bitcoin
EIP-1559, EIP-3198, EIP-3529, EIP-3541, and EIP-3554 — which are all part of the latest upgrade — have already gone live on the Ropsten testnet.
- The total value locked (TVL) across the DeFi landscape has increased by over 14% over the past fortnight.
- Despite its current positive momentum, ETH is still showcasing a negative 30-day yield of 15%
- 100,000 ETH tokens were recently locked into the ETH2.0 staking contract, thus suggesting an increasing amount of market support for the altcoin.
Things seem to be looking extremely positive for Ethereum, the world's second-largest cryptocurrency by total market capitalization, especially after the premier altcoin scaled up to a price point of AU $3,200 less than 12 hours ago. As a result, the digital asset is currently exhibiting weekly gains in excess of 15% and trading at AU $3,040.
It is quite clear to see that this latest wave of bullish support has come in the wake of the Ethereum network deploying its much-awaited London Upgrade on the Ropsten test net. The hard fork consists of a number of Ethereum Improvement Proposal (EIP) 1559 that seek to mitigate a wide range of the altcoin's existing gas fee and congestion-related issues.
As per Ethereum's envisioned roadmap, after the Ropsten testing concludes, the upgrade will be rolled out across other test-net environments — including Goerli, Rinkeby, and Kovan — over the next few weeks, in a step-by-step manner. If the execution goes as planned, experts believe that Etherum's transition to the proof-of-stake (PoS) framework (which is slated to take place over the next year or so) will become much easier.
On the subject, James Beck, director of communications and content forConsenSys, a firm that is currently involved in the building of ETHs burgeoning ecosystem, believes that by introducing the 'base fee burn' feature, Ethereum will be faced with a lot of deflationary pressure, potentially transforming it into an attractive long-term store of value (a mantle that is currently held tight by Bitcoin). He then went on to add:
"In theory, the more transactions that occur, the more deflationary pressure that the burning of the base fee will have on the overall Ethereum supply."
Momentum seems to be building behind the scenes
As per data released by analytics firm CryptoQuant, the day the London Upgrade went live on the Ropsten Testnet, a little over 100,000 ETH tokens were staked and locked into the Eth2 deposit contract. At press time, the value of the aforementioned crypto haul works out to approximately AU $305 million.
This sudden surge in interest — especially when considering the day of the move — seems to quite suggestive of the positivity surrounding the Ethereum network. In fact, it stands to reason that if EIP-1559 and EIP-3554 are able to deliver on their long-standing promises (of lower network fees), ETHs value could gain a lot of momentum in the coming few days and weeks.
After AU$300 million worth of Ethereum options expired last week, the general sentiment surrounding ETH seems to have turned bullish. In this regard, it should be pointed out that the Decentralized Finance (DeFi) market, which had been struggling off late, has been on a tear recently, with the total value locked (TVL) across the ecosystem rising from AU $64 billion to AU $75 billion since June 27.
Disclosure: The author owns a range of cryptocurrencies at the time of writing