Saturday, June 10, 2023

The Ethereum Killers


At the beginning of 2022, all three coins had lost at least one-third of their value.

With a 20% decline in price since the beginning of the month, Bitcoin has had an awful month. In contrast to BTC’s woes, other cryptocurrencies in the top 15 by market capitalization, have fared significantly worse. This includes the “Ethereum killers.”

Avalanche has seen a 36% decline in value. Solana has lost 42% of its cash worth. Terra is down 40%, and Solana is down 42%. Since the beginning of the year, Algorand’s value has decreased by 43 percent. Cardano, which was towards the top of the market, dropped by 20%. On the other hand, Polkadot, which was near the bottom, dropped by 27%—roughly the same decrease as Ethereum itself.

It’s more accurate to term these networks “Ethereum killers,” because they replicate the decentralized structure of Ethereum. It also employs smart contracts to automate processes, but are faster and cheaper to operate.

This year has seen a rise in the popularity of Ethereum-based inventions including decentralized finance (DeFi), NFTs, and blockchain-based gaming. Newer networks compete with their technology because they can’t match Ethereum’s user base. Stake models are most commonly used. This means transactions are completed faster and at a lower cost than they would be on Ethereum. Additionally, it has experienced network congestion in the past.

And in 2021, the vehicle appeared to be in excellent shape.

The Road Map

According to data from CoinMarketCap, Solana had $26 million in daily trading volume and a price of $1.84 at the end of 2020. In contrast, it ended the year with $1 billion in volume and a price of $178.52. By DeFi Llama’s calculation, in the same time period there went from nothing to almost 65 million coins (worth more than $11 billion) attached to the network’s DeFi protocols, including exchanges, derivatives markets, and stake services.

From $11.13 on July 1 to $114.16 on December 31 of 2021, the price of Avalanche increased tenfold. From $5.73 to $91.36 in Q3 through Q4, Terra followed a similar trajectory.

The possibility exists that some of the developments were canceled. Solana is back below $100, Terra is half that at $51, and Avalanche is in the middle of the pack at $70. Terra and Solana are trading side by side.

After a good end to the week, Bitcoin was able to maintain its losses around 20 percent. This is despite being the focus of much of the crypto market’s attention. Despite this, January 2019 is shaping up to be the worst since 2018 and the start of the so-called “Crypto Winter.”

In spite of this, the market appears to be recovering from the recent fall. For Bitcoin, at least, investor interest appears to be slightly higher than it was in the past. Investment firm CoinShares oversees two Bitcoin-related exchange-traded funds: Grayscale Trust and ProShares Trust. They have seen cumulative inflows in each of the last two weeks, according to CoinShares.

CoinShares does not yet include Ethereum, Solana, and other assets tracked by CoinShares. Ethereum’s investment products lost more than $27 million last week, with Polkadot and Solana losing an extra $5.3 million each.

The gruesome month of January hasn’t let up.

Christina Jones
Christina Jones
Christina Jones is the owner and CEO of Cryptoconstellation Before starting Crytpoconstellation, Christina spent ten years as an Editor in Chief at a well-known publishing house, Editorial Planeta SL, in Madrid.

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