What are the big positives for Ethereum in 2024? What are some of the tracks in the Ethereum ecosystem that are worth ambushing?
The reason why the Ethereum ecosystem is about to explode in full force is because of the major positive factors that are coming. First, the upcoming Cancun upgrade is one of the major updates to Ethereum this year, which includes EIP 4844. This update aims to improve the efficiency, scalability, and security of the Ethereum blockchain.
The update will significantly reduce the cost of the Layer 2 ecosystem built on Ethereum, resulting in a corresponding reduction in gas fees. This will be a huge boost to the adoption of Ethereum and layer 2 as a whole. The Cancun upgrade will usher in the era of dice on Ethereum's roadmap, a key turning point in the current cycle. Ethereum needs to rely on layer 2 to scale, and the various layer 2 child chains and professional development teams are also driving its rapid growth.
At the beginning of the big bull market, all project parties will definitely go all out, after all, everyone has been waiting for 4 years, and they will definitely not miss this opportunity again. These factors have laid the foundation for the full-scale explosion of the Ethereum ecosystem.
A verkle tree is a data structure that is used to efficiently store and retrieve large amounts of key-value pair data. It is an efficient variant of the Merkle tree designed to reduce storage space requirements and improve data access efficiency. The integration of the Verkle tree will enable enhanced functionality of staking nodes on the Ethereum blockchain while improving the user experience. By reducing disk space requirements, verkle trees help make Ethereum more efficient and easy to use, which in turn attracts more users to the Ethereum ecosystem.
Another big positive is the expectation of approval for the Ethereum spot ETF. At present, many institutions have submitted applications for Ethereum spot ETFs to the US Exchange Commission (SEC), including Bright Lock, Grayscale, GETC, and Sister Wood's AIK**. Once approved, the Ethereum spot ETF will provide institutional and individual investors with a more convenient way to invest in Ethereum, bringing more inflows and attention to the Ethereum ecosystem.
According to a research report by the head of the Grayscale ETF and the US investment bank, there is a 50% chance that the Ethereum spot ETF will be approved in May this year, and it can almost reach a 100% probability by the end of this year. This means that the approval of the Ethereum spot ETF is only a matter of time. Similar to the situation of Bitcoin spot ETFs, most of the gains tend to occur in the anticipatory phase before approval. At this stage, the market will hype the possibility of an ETF being approved, pushing *** However, once it is actually approved, **may appear**. There are some lessons to be learned from the situation at the time of the Ethereum Shanghai upgrade.
Although there was a ** situation after the last Ethereum upgrade, I think this time may be different. Because the last upgrade took place in a bear market, and now we can be 100% sure that a bull market has arrived. Therefore, I expect that there may be a short-term ** after this Ethereum Cancun upgrade, but then there may be a big **. In a bull market, we must follow ten rules, not forget about volatility in the market, and don't be afraid. Every time is a great opportunity, we have to keep an eye on the market and be prepared.
The third major benefit is the landing of Taifang's ecological application
Looking at the last bull market cycle, we can see that there are many web3 killer applications that are known as on-chain, but in reality, they are rarely seriously maintained by the project side. In the past, they have had to compete with other cryptocurrencies, as well as FTTs, etc., to compete for space for growth. Therefore, this is one of the reasons why everyone has seen the lack of vitality of the Ethereum ecosystem recently.
However, by 2024, the rules of the game will change, and Ethereum's ecosystem is moving towards an era of specialization. Currently, the most dominant layer 2 networks are segmenting specific configurations and specialized teams and structures. I believe that this year we will see many high-quality applications launched, and many applications in the Ethereum ecosystem will go from being mere usable to having a better experience, which will attract more users and will surely lead to a renewed boom in the Ethereum ecosystem.
The next positive is about Ethereum's deflationary nature. Since the last Merge, Ethereum has been deflationary. Since September 2022, the number of Ethereum has decreased by about 370,000, accounting for 021%。Stakers have been rewarded with more than 1.06 million ETH, however, over the same period, the new burn mechanism has permanently burned more than 1.4 million ETH.
In the last two weeks, there have been more than 210,000 ETH was burned, worth $22.8 million. Therefore, it is important to note that although it is known that Bitcoin is about to halving, i.e., the mining rewards will be reduced, Bitcoin does not have deflationary properties. In contrast, Ethereum's volume is not only not growing, but it is constantly deflationary. Therefore, there are market voices that believe that it is possible for Ethereum to surpass Bitcoin? From a deflationary point of view, this is not impossible.
One last look at the ones that concern the most:What are the tracks in the Ethereum ecosystem that are worth ambushing?
The first track is Ethereum's layer 2 network, which is subdivided into two different layer 2 networks, optimistic and zk rollup.
The second track to watch is in the area of DApp development and data storage, while the third is about RaaS service providers, which is also an area worth keeping an eye on.
The fourth track involves LSD (on-chain data) and duplicate staking. As for which tokens in each track deserve our attention and holding, due to time constraints, I will share them and analyze them in detail in the next article.