Ethereum navigating the market amid growing competition

Grayscale Research sees a bright future for Ethereum; however, it is filled with challenges and is subject to the way in which it navigates its way around the competition. For instance, Solana and Tron are doing better when it comes to daily transactions. But Ethereum grabs the spotlight in terms of weekly developments and revenue. Also, Ethereum does have its security aspects to boost.

Where it lags at the moment is with transaction fees. Grayscale Research is optimistic about Ethereum because of its upcoming upgrades, net deflationary supply, potential approval of the Spot Ether ETF, and network revenue generation of $2 billion in 2023. Also, Grayscale Research believes that the use cases of the network are increasing with time, which better supports the bullish sentiment.

Ethereum is largely picking up on the first-mover advantage, just like Bitcoin. BTC continues to dominate the market in terms of token valuation. Ethereum, on the other hand, gains an edge with its smart contract functionality. It is the same offering that helps one to architect their decentralized applications, also known as dApps.

As for revenue, Ethereum generated over $2 billion in the previous year, way ahead of any other L1 solution in the market. The next best bet on the list was Tron, with $425 million. Its Total Value Locked speaks volumes, too, and so does the hosting of dApps on the network. They are $45.9 billion and 4,479, respectively, for 2023.

Contradicting that stand are daily addresses, lagging at 377k, behind Solana, Tron, and Polygon with 695k, 1,467k, and 574k in the same order. Ethereum remains at the top, with the highest market cap of $352 billion.

Dencun upgrade is tentatively scheduled to happen on March 13, 2024. It represents a major step in the direction of enhancing scalability in the Smart Contract Platforms Crypto Sector. Spot Ether ETF could bring all the spotlight to Ethereum. The token was last seen listed at $3,101.41, with a surge of 1.80% in the last 24 hours. Ethereum prediction estimates that Ether will end 2024 at $5,097.21. Dencun and Spot Ether ETF will inevitably take the floor this year.

Ethereum is now deflationary as a result of the Merge upgrade; the PoS mechanism and the burning of transaction fees are reducing the supply of ETH. It has been met with security, revenue, network effects, and liquidity to position the ecosystem in a better spot uniquely.

According to Grayscale Research, the network only outperforms rivals because it is still in its adolescent phase. Despite being in the market for a fairly long time, it signals that the network is acting as if it has been launched and is awaiting a major development. As upgrades happen, Ethereum will only grow to close the gap in throughput and cost.

A direct comparison between Ethereum and Solana shows how the market is behaving. Solana lags behind when it comes to the market cap but is quick to surpass the network giant in the segment of daily transactions and average transaction costs. They stand at 24,128k and $0.001, respectively. Ethereum drives the market cap and revenue sections but falls behind those with $1,162k and $2.3 stats, respectively.

Moving forward, ETH 2.0 will take the floor. It comes with a split between networks, introducing specialized parts based on their respective functions. This entails the expected specialized parts, namely storing transaction data, processing transactions, and verifying the validity of transactions. Also, the Dencun upgrade is poised to help the network grow out of its adolescent phase.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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