[ad_1] <br><div data-test-id="content-container"><figure class="getty-figure" data-type="getty-image"><picture> <img src="https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w750" alt="Ethereum classic coin on black gravel background" data-id="1349331195" data-type="getty-image" width="6720px" height="4480px" srcset="https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w1536 1536w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w1280 1280w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w1080 1080w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w750 750w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w640 640w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w480 480w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w320 320w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1349331195/image_1349331195.jpg?io=getty-c-w240 240w" sizes="(max-width: 768px) calc(100vw - 36px), (max-width: 1024px) calc(100vw - 132px), (max-width: 1200px) calc(66.6vw - 72px), 600px"/> </picture><figcaption> <p class="item-credits">Andres Victorero</p></figcaption></figure><p>It has now been two full months since Ethereum (<a target="_blank" href="https://seekingalpha.com/symbol/ETH-USD" title="Ethereum USD" rel="noopener">ETH-USD</a>) efficiently merged from proof of labor to proof of stake. Regardless of that occasion being one of many extra vital tales within the historical past of crypto, it has already been fully overshadowed<span class="paywall-full-content"> by the collapse of FTX (</span><a target="_blank" href="https://seekingalpha.com/symbol/FTT-USD" title="FTX Token" class="paywall-full-content" rel="noopener">FTT-USD</a><span class="paywall-full-content">). And rightfully so. The FTX story is one which transcends crypto and is one more egregious black eye on the blockchain house as an investable alternative.</span></p> <p class="paywall-full-content">However I need to make my ideas on FTX very clear; the autumn of FTX shouldn't be a failure of crypto or of monetary laws. In my opinion, it's a failure of danger administration, transparency, and the motion towards the centralization of blockchain-based property. It is a disgrace that it occurred and I really feel horrible for the individuals who misplaced cash, however the good networks on this house simply stored making new blocks even when different cash collapsed and firms went bust.</p> <p class="paywall-full-content">An enormous loser from the Alameda/FTX fallout <a target="_blank" href="https://seekingalpha.com/article/4556450-solana-its-worse-than-ftx-contagion" title="https://seekingalpha.com/article/4556450-solana-its-worse-than-ftx-contagion" rel="noopener">appears to be Solana</a> (<a target="_blank" href="https://seekingalpha.com/symbol/SOL-USD" title="Solana USD" rel="noopener">SOL-USD</a>). Solana is without doubt one of the famed "ETH killers" from the bull run of 2021 and the way forward for that chain now seems extremely unsure. The checklist of potential ETH killers additionally included Avalanche (<a target="_blank" href="https://seekingalpha.com/symbol/AVAX-USD" title="Avalanche" rel="noopener">AVAX-USD</a>) and Cardano (<a target="_blank" href="https://seekingalpha.com/symbol/ADA-USD" title="Cardano USD" rel="noopener">ADA-USD</a>). Regardless of the quantity of Layer 1 blockchains that determine to compete with Ethereum, among the finest development in good contracts over the past a number of months has truly been within the Layer 2 Ethereum chains. Let's dig in.</p> <h2 class="paywall-full-content">Polygon</h2> <p class="paywall-full-content">Probably the most beneficial Ethereum scaler is Polygon (<a target="_blank" href="https://seekingalpha.com/symbol/MATIC-USD" title="Polygon USD" rel="noopener">MATIC-USD</a>). It has a $7.7 billion circulating market cap and an $8.8 billion absolutely diluted cap. 87% of the max 10 billion token provide is at present in circulation. Each day transactions on Polygon, whereas decrease than the increase skilled in the summertime of 2021, have been solidly within the 2-3 million vary for a number of months:</p> <figure class="regular-img-figure paywall-full-content" contenteditable="false"><picture> <span><a target="_blank" href="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687209430320091_origin.jpeg" rel="lightbox noopener" data-width="1200" data-height="1100" title="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687209430320091_origin.jpeg" data-og-image-twitter_small_card="true" data-og-image-twitter_large_card="true" data-og-image-twitter_image_post="true" data-og-image-msn="true" data-og-image-facebook="true" data-og-image-google_news="true" data-og-image-google_plus="true" data-og-image-linkdin="true"><img src="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687209430320091.jpeg" alt="Polygon Daily Transactions" width="640" height="587" contenteditable="true" data-width="640" data-height="587" loading="lazy"/></a></span> </picture><figcaption><p class="item-caption">Polygon Each day Transactions <span>(Polyscan)</span></p></figcaption></figure><p class="paywall-full-content">Transactions are regular, but it surely's the customers of Polygon that proceed to develop:</p> <figure class="regular-img-figure paywall-full-content" contenteditable="false"><picture> <span><a target="_blank" href="https://static.seekingalpha.com/uploads/2022/11/17/50832021-1668721149848156_origin.jpg" rel="lightbox noopener" data-width="1068" data-height="508" data-og-image-twitter_small_card="true" data-og-image-twitter_large_card="true" data-og-image-twitter_image_post="true" data-og-image-msn="true" data-og-image-facebook="true" data-og-image-google_news="true" data-og-image-google_plus="true" data-og-image-linkdin="true"><img src="https://static.seekingalpha.com/uploads/2022/11/17/50832021-1668721149848156.jpg" alt="ETH v MATIC DAUs" width="640" height="304" contenteditable="true" data-width="640" data-height="304" loading="lazy"/></a></span> </picture><figcaption><p class="item-caption">ETH v MATIC DAUs <span>(Token Terminal)</span></p></figcaption></figure><p class="paywall-full-content">The each day energetic person development on Polygon has been so robust that it's now almost at par with Ethereum's each day energetic customers over the past a number of months. Polygon has averaged 439k each day energetic customers within the first half of This autumn-22; an 18% yr over yr improve. Ethereum has 446k within the first half of This autumn-22; a decline of 21% yr over yr. Ethereum's base layer utilization stays comparatively fixed at the same time as scaling chains proceed to see development in key utilization metrics. The great thing about this relationship is the L2 chains permit for scalability however all of them nonetheless want ETH on the base layer. This implies development in chains like Polygon, Optimism (<a target="_blank" href="https://seekingalpha.com/symbol/OP-USD" title="Optimism" rel="noopener">OP-USD</a>), and Arbitrum (<a target="_blank" href="https://seekingalpha.com/symbol/ARB-USD" title="Arbit Coin USD" rel="noopener">ARB-USD</a>) add worth to Ethereum.</p> <h2 class="paywall-full-content">Optimism &amp; Arbitrum</h2> <p class="paywall-full-content">Whereas the each day actives for different Ethereum scaling chains will not be fairly as giant as what we're seeing on Polygon, there isn't any doubt that Optimism and Arbitrum have change into way more common amongst crypto customers within the final a number of months.</p> <figure class="regular-img-figure paywall-full-content" contenteditable="false"><picture> <span><a target="_blank" href="https://static.seekingalpha.com/uploads/2022/11/17/50832021-166872128980049_origin.jpg" rel="lightbox noopener" data-width="1056" data-height="522" data-og-image-twitter_small_card="true" data-og-image-twitter_large_card="true" data-og-image-twitter_image_post="true" data-og-image-msn="true" data-og-image-facebook="true" data-og-image-google_news="true" data-og-image-google_plus="true" data-og-image-linkdin="true"><img src="https://static.seekingalpha.com/uploads/2022/11/17/50832021-166872128980049.jpg" alt="Avalanche, Optimism, Arbitrum DAUs" width="640" height="316" contenteditable="true" data-width="640" data-height="316" loading="lazy"/></a></span> </picture><figcaption><p class="item-caption">Avalanche, Optimism, Arbitrum DAUs <span>(Token Terminal)</span></p></figcaption></figure><p class="paywall-full-content">Arbitrum has now flipped the each day energetic customers on Layer 1 chain Avalanche and Optimism is not too far behind. Not solely is Avalanche not likely competing with Ethereum as a base layer chain, however Avalanche is behind almost 3 distinctly totally different layer 2 Ethereum chains as properly - Polygon's DAUs aren't pictured within the chart above as a result of the determine is a lot increased that it will distort the chart. Each scaling chains are seeing important development in each day transactions:</p> <figure class="regular-img-figure paywall-full-content" contenteditable="false"><picture> <span><a target="_blank" href="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687413550094857_origin.png" rel="lightbox noopener" data-width="1403" data-height="678" data-og-image-twitter_small_card="true" data-og-image-twitter_large_card="true" data-og-image-twitter_image_post="true" data-og-image-msn="true" data-og-image-facebook="true" data-og-image-google_news="true" data-og-image-google_plus="true" data-og-image-linkdin="true"><img src="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687413550094857.png" alt="Daily Transactions" width="640" height="309" contenteditable="true" data-width="640" data-height="309" loading="lazy"/></a></span> </picture><figcaption><p class="item-caption">Each day Transactions <span>(Etherscan explorers)</span></p></figcaption></figure><p class="paywall-full-content">This chart seems quite a bit just like the one for each day energetic customers. Solely right here we see Optimism has already joined Arbitrum in flipping each day transactions on Avalanche. Arbitrum was doing between 50-100k each day transactions over the summer time. It has been averaging slightly below 400k each day transactions to date within the month of November. Not too far off, Optimism is averaging about 350k each day transactions in November. Avalanche has fallen beneath 200k month to this point and Cardano has <a target="_blank" href="https://cardanoscan.io/" rel="nofollow noopener" title="https://cardanoscan.io/">averaged under 80k</a> to date.</p> <p class="paywall-full-content">As these second layer Ethereum chains proceed to onboard new customers, the scaling chains add worth to Ethereum; which continues to be the bottom layer safety chain that helps form how the Web3 web would possibly look sooner or later. We're now formally on the level the place not one however three Ethereum scaling chains have higher on-chain utilization traits than Solana, Avalanche, and Cardano in some key areas.</p> <h2 class="paywall-full-content">Ethereum Killers? Probably not</h2> <p class="paywall-full-content">For all of the hypothesis final yr that Ethereum would have huge competitors from different Layer 1 blockchains with sooner block occasions and extra transactions per second, we merely have not seen something provided by different crypto builders manifest into a real inheritor to the throne. And in actuality, <span id="jS$781" class="j3">Solana (<a target="_blank" href="https://seekingalpha.com/symbol/SOL-USD" title="Solana USD" rel="noopener">SOL-USD</a>)</span>, the one L1 that I believed had the very best probability in opposition to Ethereum is perhaps on borrowed time.</p> <span class="table-responsive paywall-full-content"><span class="table-scroll-wrapper"><span data-intersection-boundary="start"/><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <th>TVL Share</th> <th>12/31/21</th> <th>11/17/22</th> </tr> <tr> <td>Ethereum</td> <td>57.3%</td> <td>58.0%</td> </tr> <tr> <td>Binance</td> <td>7.2%</td> <td>12.0%</td> </tr> <tr> <td>Tron</td> <td>3.2%</td> <td>10.1%</td> </tr> <tr> <td>Polygon</td> <td>3.1%</td> <td>2.6%</td> </tr> <tr> <td>Avalanche</td> <td>6.2%</td> <td>2.1%</td> </tr> <tr> <td>Arbitrum</td> <td>1.1%</td> <td>2.2%</td> </tr> <tr> <td>Optimism</td> <td>0.2%</td> <td>1.3%</td> </tr> <tr> <td>Cronos</td> <td>1.0%</td> <td>1.4%</td> </tr> <tr> <td>Fantom</td> <td>2.2%</td> <td>1.0%</td> </tr> <tr> <td>Solana</td> <td>3.9%</td> <td>0.7%</td> </tr> <tr> <td>Others</td> <td>14.6%</td> <td>8.6%</td> </tr> </table> <span data-intersection-boundary="end"/></span><button class="table-enlarge-button"><svg xmlns="http://www.w3.org/2000/svg" viewbox="0 0 16 16" class="table-enlarge-icon"><path fill-rule="evenodd" clip-rule="evenodd" d="M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z"/></svg>Click on to enlarge</button></span> <p class="paywall-full-content">Supply: DeFi Llama</p> <p class="paywall-full-content">Even with the proliferation of different choices, Ethereum remains to be the king of DeFi. Whereas it is true Binance (<a target="_blank" href="https://seekingalpha.com/symbol/BNB-USD" title="Binance Coin USD" rel="noopener">BNB-USD</a>) and Tron (<a target="_blank" href="https://seekingalpha.com/symbol/TRX-USD" title="Tronix USD" rel="noopener">TRX-USD</a>) have seen sooner development than Ethereum, Ethereum is coming from a a lot bigger beginning spot. Moreover, after we mix TVLs of ETH and the L2 chains on Ethereum, we see Ethereum as a community is not shedding share in any respect:</p> <span class="table-responsive paywall-full-content"><span class="table-scroll-wrapper"><span data-intersection-boundary="start"/><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <th>TVL Share</th> <th>12/31/21</th> <th>11/17/22</th> </tr> <tr> <td>Ethereum</td> <td>57.3%</td> <td>58.0%</td> </tr> <tr> <td>Polygon</td> <td>3.1%</td> <td>2.6%</td> </tr> <tr> <td>Arbitrum</td> <td>1.1%</td> <td>2.2%</td> </tr> <tr> <td>Optimism</td> <td>0.2%</td> <td>1.3%</td> </tr> <tr> <td><em>Mixed</em></td> <td><em>61.7%</em></td> <td><em>64.1%</em></td> </tr> </table> <span data-intersection-boundary="end"/></span><button class="table-enlarge-button"><svg xmlns="http://www.w3.org/2000/svg" viewbox="0 0 16 16" class="table-enlarge-icon"><path fill-rule="evenodd" clip-rule="evenodd" d="M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z"/></svg>Click on to enlarge</button></span> <p class="paywall-full-content">Supply: DeFi Llama</p> <p class="paywall-full-content">It is Avalanche, Solana, and the remainder of the L1 chains which might be shedding floor in DeFi to Ethereum and Binance. From a protocol diversification perspective, Ethereum is on way more secure footing than Binance or Tron:</p> <span class="table-responsive paywall-full-content"><span class="table-scroll-wrapper"><span data-intersection-boundary="start"/><table> <colgroup> <col/> <col/> </colgroup> <tr> <th>TVL Share</th> <th><p>Protocols</p></th> <th><p>Protocol Dominance</p></th> </tr> <tr> <td>Ethereum</td> <td>601</td> <td>26.7%</td> </tr> <tr> <td>Binance</td> <td>500</td> <td>51.1%</td> </tr> <tr> <td>Tron</td> <td>10</td> <td>65.7%</td> </tr> <tr> <td>Polygon</td> <td>333</td> <td>25.2%</td> </tr> <tr> <td>Arbitrum</td> <td>139</td> <td>42.7%</td> </tr> <tr> <td>Optimism</td> <td>86</td> <td>24.1%</td> </tr> </table> <span data-intersection-boundary="end"/></span><button class="table-enlarge-button"><svg xmlns="http://www.w3.org/2000/svg" viewbox="0 0 16 16" class="table-enlarge-icon"><path fill-rule="evenodd" clip-rule="evenodd" d="M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z"/></svg>Click on to enlarge</button></span> <p class="paywall-full-content">Supply: DeFi Llama</p> <p class="paywall-full-content">Protocol dominance is the quantity of a sequence's TVL that's attributable to at least one utility. The bigger the quantity the extra reliant the chain is on the success of 1 protocol for TVL. The desk above exhibits Binance and Tron have usually poor TVL diversification. Tron's is especially unhealthy due to the excessive degree of dominance on one utility and simply 10 protocols whole.</p> <h2 class="paywall-full-content">Ethereum's Provide/Demand Mechanics</h2> <p class="paywall-full-content">As I famous in my Ethereum article <a target="_blank" href="https://seekingalpha.com/article/4546469-want-an-inflation-hedge-buy-ethereum" title="https://seekingalpha.com/article/4546469-want-an-inflation-hedge-buy-ethereum" rel="noopener">from last month</a>, Ethereum has was a deflationary asset. Nonetheless, on the time of that article there have been roughly 7,000 new ETH cash issued for the reason that Merge. That determine has now turned convincingly as considerably extra ETH has been burned than issued over the past 10 days:</p> <figure class="regular-img-figure paywall-full-content" contenteditable="false"><picture> <span><a target="_blank" href="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687422994178562_origin.jpg" rel="lightbox noopener" data-width="1172" data-height="370" data-og-image-twitter_small_card="false" data-og-image-twitter_large_card="false" data-og-image-twitter_image_post="false" data-og-image-msn="false" data-og-image-facebook="false" data-og-image-google_news="false" data-og-image-google_plus="false" data-og-image-linkdin="false"><img src="https://static.seekingalpha.com/uploads/2022/11/17/50832021-16687422994178562.jpg" alt="ETH Burned" contenteditable="true" loading="lazy"/></a></span> </picture><figcaption><p class="item-caption"><span>ultrasound.cash</span></p></figcaption></figure><p class="paywall-full-content">ETH has gone from +7k issuance for the reason that Merge a month in the past to web unfavorable provide for the reason that Merge. That is the sort of provide/demand dynamic that may actually put a flooring underneath the value of ETH even in an prolonged crypto winter if demand for the community continues to develop as we're seeing on the scaling chains.</p> <h2 class="paywall-full-content">Dangers</h2> <p class="paywall-full-content">Sentiment in crypto is about as unhealthy as I can recall seeing it. That may very well be a sign that we have lastly capitulated or it may very well be a sign that the thesis actually is useless this time. I do not assume it is the latter. One might argue we're truly nearer to the top than the center of crypto winter. What stays to be seen is what the regulatory headwinds may very well be for each crypto broadly and Ethereum particularly. There might be nearly little question FTX might be seen as a possibility for individuals who wish to see extra oversight of the business from regulatory our bodies in the USA. It is solely potential the SEC might view ETH as a safety. I do not personally share that view however my opinion is irrelevant to Gary Gensler.</p> <h2 class="paywall-full-content">Abstract</h2> <p class="paywall-full-content">The expansion within the Ethereum scalers coupled with the obvious failings of a number of infamous "Ethereum Killers" tells me that Ethereum remains to be the king of the good contract house. Slightly than make even small bets on L1 chains which might be in all probability doomed to fail, it is perhaps wiser to wager on the continued growth of Ethereum's scaling chains and the worth these chains add to Ethereum. I believe MATIC goes to be a giant winner. Optimism may very well be as properly however that chain has <a target="_blank" href="https://seekingalpha.com/mp/1406-blockchain-reaction/articles/5774576-watchlist-spotlight-optimism" title="https://seekingalpha.com/mp/1406-blockchain-reaction/articles/5774576-watchlist-spotlight-optimism" rel="noopener">tough tokenomics</a> and Arbitrum does not have a token in any respect. One of the simplest ways to play development within the Ethereum ecosystem remains to be simply by shopping for and holding ETH.</p></div> <br>[ad_2] <br><a href="https://news.google.com/__i/rss/rd/articles/CBMiU2h0dHBzOi8vc2Vla2luZ2FscGhhLmNvbS9hcnRpY2xlLzQ1NTkwNzQtZXRoZXJldW0tc3RpbGwtYmVzdC1iZXQtaW4tc21hcnQtY29udHJhY3Rz0gEA?oc=5">Source link </a>