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Cryptocurrencies have a total value of about $2 trillion. Although Bitcoin accounts for about 50% of this value, Ethereum’s growth rate is over 180% to date.
Many new crypto consumers tend to focus more on Bitcoin. The notion is that one crypto asset will prevail in the long haul, challenging investors to choose the best one. However, this may not be true.
Every crypto asset, whether Ethereum (ETH) or Bitcoin, focuses on varying user causes. For instance, the success of Bitcoin cannot impede Ethereum’s growth. Bitcoin is a go-to option for investors who want to protect their digital assets against seizure.
On the other hand, other coins such as Moreno and XRP prioritize speed and privacy for payments. Ethereum is growing in popularity daily, and investors in digital assets are taking a close look at it.
This article highlights the four reasons ETH will lead the decentralized finance (DeFi) movement.
1. Evolution of Programmable Money
Ethereum is the first crypto asset to adopt the programmable money concept. This concept enables the execution of complex transactions than direct payments. While other digital assets can perform transactions, ETH supports more complexity and customization.
ETH is rethinking the possibilities of decentralized exchanges (DEX). Programmable transactions mean peers can exchange digital assets faster and conveniently. This includes transactions in fintech services such as trust entities and escrow accounts.
2. Ethereum Recently Experienced an Explosive Growth Rate
Generally, ETH ranks as one of the most traded digital assets after Bitcoin. Ethereum experienced an increasing number of DeFi developers using its blockchain network. This includes the rise of collectible digital arts such as non-fungible tokens (NFT).
There is also an increasing concern from institutions to handle crypto as any other security. The biggest institution is Coinbase, ranking ETH at number two after Bitcoin. All these activities attribute to Ethereum’s increasing growth rate.
Also, other cryptos such as Bitcoin are relatively stable. You can buy Bitcoin at reputable vendors such as bytefederal.com.
Stablecoins are the digital assets connecting crypto and fiat currency. Stablecoins are a go-to option for parking money in fiat currency without going through DEX. It can also be a wire alternative if you want to eliminate red tape and transaction fees.
Ethereum is a leading issuer of Stablecoins, thanks to its flexible digital contract. All popular Stablecoins such as USDC and Tether run on the Ethereum network. Besides, these Stablecoins keep growing and don’t show any indications of slowing down.
Do you know ETH digital contracts can support lending and borrowing, just like banks? Compound recently had success with this experiment. The decentralized money market allows users to deposit digital assets and earn interest.
Similarly, borrowers can access loans against collateral. The main backers for Compound include Bain Capital.
The Future and Sustainability of Ethereum
All the above programs run on the Ethereum network. Thus, there is a high possibility of combining all programs to offer an entirely new solution. If Ethereum becomes the base layer of DeFi, we can expect a tremendous shift in financial services.
The breakthrough of DeFi meets the needs of the average modern consumer. It could eliminate transaction costs or insolvency, thanks to transparency. So, is it an excellent investment? Well, the risks are commensurate to the ROI.
Check more blogs on our website for more in-depth insights into ETH.