Wow! This is amazing... I don't check often for the total market cap of Ethereum and other major cryptocurrencies. I do it often for minor ones, to understand when they could be underestimated and when they're valued too much. Personally, I've never used much the Ethereum chain, because of the high fees. I've started my defi trip with Binance Smart Chain and I will see what's on Polkadot soon.
Am I the only one who missed the evidence that the Ethereum total market cap is around 100 BILLIONS DOLLARS?
Beloved readers... I'm really bullish and optimistic about cryptocurrencies, but we need to be realistic.
Do you think, sincerely, that the Ethereum machinery is worth that much?
How much do you think should be worth?
If we agree that the value of a crypto project lies behind it's community of users and developers, than surely Ethereum should be worth a lot, but I still think 100 Billions is too much. This is to say that this actual price of over 1'000$ per token is too high to be sustainable.
From this point of view, Leo Tokens have a super-mega future in front of them :-) But here I'm talking about Ethereum stuff.
The point is that till we don't have a massive movement of investment capital flowing into the various Ethereum DeFi projects, than it can't be that expensive.
I was thinking about adding together all of the Locked Values around. I'm speaking about the famous TVLs (Total Value Locked) which any good DeFi project is proud to show somewhere in the homepage. This is the dollar equivalent of all assets being deposited/farming/loaning ecc ecc on the platform.
Using this total value (across all Eth projects) as an indicator of the worthiness of the Ethereum Virtual Machine should be a good idea, it seems.
But then consider that most of those DApps are also offering their own token. So to have an idea of how much Ethereum should be worth, one should ideally subtract the value of the market capital of coins like Compound, Maker, UNI ecc ecc...
Or am I wrong? I'm simplifying of course, but I think I'm not that wrong. However, at this fantastic website,
one can read a 20 Billion TVL across DeFi applications. Maker is dominating, with a 18% of this value. Here's what you see at DeFi Pulse:
The locked amount here refers to asset locked into smart contracts. Remember that one needs smart contracts for everything, on a DApp. They are what makes the whole system fairand trustless: think about when one put to stake his Cake coins or Pancake swap, for example. That's a smart contract.
Now, with those numbers at hands, how can Ethereum market cap be 100 Billion? Speculation!
If, one day, a good part of the wordwide finance will be running on the Ethereum chain, then it could be even 100x worth. But for now? Looking at the numbers above I would say it's still not time to open the Champagne bottle...
But it's still very impressive!
I'm always happy whenever a crypto enjoy popolarity: it's not important if it is not your preferite one, the importance is to go ahead here.
One more factor which determines the Ethereum token price is the rude fact of having high gas fees. But those are not really lost, because miners earn them, it's literally their job, as they elaborate a Proof-of-Work. So those coins do not exit the game, they're still in: but probably, a good part of the miners prefer to hold their coins, and will sell eventually, in the case of need.
Add to this that Ethereum his making the promise to move to a Proof-of-Stake consensus algorithm, which will make mining less expensive (neglegible electricity costs), should lower the fees and, most importantly, make the chain way faster and scalable.