Ethereum is the second blockchain in terms of capitalization, but the first in terms of the use of smart contracts.Automatic algorithms made this networkreally popular, but the slow proof-of-work protocol led to transaction delays and a significant increase in fees. Today we will describe the main trends in the development of the network and give an Ethereum forecast for 2022.
Scope of application
Smart contracts have found their application:
Most projects for monetization issue their own tokens, however, Ethereum is the main blockchain.
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In the DeFi sector, Ethereum dominates the restblockchains with $157 billion of blocked funds or 66% of the total market. The gap is even stronger in the NFT market, where the share of altcoin exceeds 90%. The dominance of Ethereum allows for favorable forecasts given the overall growth of the market, however, competition is gradually reducing its market share.
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ProblemEthereum
Ethereum is the preferred baseblockchain for any project due to its high decentralization. However, the popularity of the network, coupled with low bandwidth, led to a significant increase in fees. Sometimes you need to pay over $50 for a transaction, which is prohibitively expensive compared to competitors. For example, in Solana, the commission is less than a cent.
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Solving the problem - switching to a protocolproof-of-stake and subsequent network scaling. Now the date of the move is the second quarter of 2022, but there is a risk that it will be postponed again. Ethereum rate forecast is largely related to the timely implementation of the roadmap, otherwise, competing blockchains will again eat up part of its market share.
Course forecast
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Markets related to the use of smart contracts,continue strong growth in 2022. Over the past year, the DeFi sectors (from $22 billion to $240 billion) and NFT (from $250 million to $2.1 billion) have grown by an order of magnitude. This year, the metaverse market is expected to boom, which can grow from $600 million to $5 billion. Despite the high network congestion, the demand for Ethereum will continue to grow, but much depends on the speed of transition to PoS.
The basic exchange rate forecast scenario assumes thatthe move to the new protocol will be postponed again. In this case, by the end of the year, Ethereum will rise in price to $7,000. If Vitalik Buterin manages to successfully merge the two branches, the cryptocurrency will come close to the $10,000 mark.
Analytical group StormGain
(platform for trading, exchanging and storing cryptocurrency)
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