Tether has fueled the growth of the Ethereum network in the last two years
Coin Metrics published on November 12 the 25th edition of its research report. On this occasion, he explores the evolution of Ethereum tokens, including Tether, since a new and easy way to create them using a smart contract was introduced into the network, which caused an explosion of tokens that made standardization happen every time. more transcendental.
The study reveals that stablecoins, especially Tether (USDT), have boosted the growth that the Ethereum network has experienced in the last two years, taking into account that 2 to 3 times more transactions in USDT are recorded in the blockchain than in the native cryptoactive Ether.
To deepen its analysis, Coin Metrics introduced a new metric by which it determines the valuation of the network: the ratio of network value to token value (NVTV). In this way, it basically measures the proportion of the total market capitalization deployed in Ethereum and compares it with that of ETH. In that sense it indicates that, the lower the proportion, it suggests greater network growth.
Therefore, the study found that Ethereum’s NVTV relationship has been steadily declining. For example, on April 1, 2019, the network’s NVTV reached a record low of 1.57. As of November 10, the ratio is 1.90, an indication of the growth that has been experiencing.
Another metric calculated by CoinMetrics analysts was the capitalization carried out, which can be considered as a measure of the base of the total amount originally invested. The result showed that the capitalization made has also steadily declined and is currently at a historical low of 2.57. An indication that tokens have been gaining ground constantly on the net, in terms of valuation.
The study determines that most of this growth that the network has experienced, since mid-2018, comes from a specific subset of ERC-20 tokens: the stablecoins.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.