The Jones is impressed with Ethereum again. Feel free to share your comments and predictions.
I’ve been utilizing a decentralised finance dapp, I link it to my metamask account . My plan is to borrow stable coins and use them to purchase assets such as ethereal which I think will grow in price. Then after a year or whatever I sell part of the assets that increased in value (hopefully) to pay back the stable coin loan and keep the extra Ethereum. My collateral is Ethereum itself. You can do the opposite and borrow an asset that you think will decrease in value , sell immediately and pay it back at reduced cost in future . I’m very bullish though at this time for most assets.
- Ethereum transaction speed has vastly improved . It can take just ten seconds to see four confirmations. Fully confirmed in minute or two. It’s fast enough to work at real world transaction speeds and so are the ERC20 tokens . It means they can be more useful for near real time transactions.
- Ethereum transaction costs are still very low in my book, often ten cents , but they are working on further protocol improvements for microtransactions and smaller payments to be viable.
- Decentralised finance is easy to get into and very flexible , if you have collateral you can get started immediately. There are many platforms in operation and rates are fully transparent . There’s a learning curve involved in calculating risk of various borrowing strategies. I’m still learning.
- Mostly folks are borrowing or depositing stable coins I believe. Dai is incredibly popular occupying most of the market and has proven to be very, well, stable so far. Around 1 billion USD is already locked up in DeFi platforms. I expect this to grow very rapidly .
This all looks great for Ethereum because they almost all rely on being ERC tokens and bring interoperable and the lower risk and trusted Ethereum network behind it.
With staking coming up soon for Ethereum, with the major stable coins all being Ethereum tokens and the need to own Ethereum for Gas to process transactions and also as a favoured DeFi collateral (which will mean more and more is locked up) and also for index funds, I just see this as incredibly bullish in the short and medium term.
Nothing else out there has an ounce of the popularity of Ethereum it surely will be the network effect winner.
Should it be good for the price, most definitely ! More so because it will attract more speculative investors again than any other factors. I’ve invested quite a bit in Ethereum over the last year so I do admit to being self interested in its success.