Research Coin Metrics says that due to the increase in the number of transactions in the blockchain on the network Ethereum there was an internal “coup”. That is why it is important.
“Flipping” of its kind occurred on the Ethereum blockchain. The data presented in this week's Coin Metrics report shows that for the first time, the number of ERC-20 transactions exceeded the number of transactions committed in ETH itself. And, no matter how popular these tokens are, they may be on the verge of concession to a newer class of non-replaceable tokens.
So what does that mean? And who should care?
The increase in the number of transactions associated with these types of tokens based on smart contracts may indicate that the Ethereum network has finally found its place among users, as evidenced by various use cases.
The Coin Metrics report, written by analyst Nate Madry, borrowed the term “flipping” – originally coined to describe other cryptocurrencies that outperform Bitcoin in value – and applied it to what he called “transaction flipping” on the Ethereum network itself.
Maddry looked back at the creation of the ERC-20 specification, which allowed the creation of tokens compatible with Ethereum. While the ease with which these tokens could be minted contributed to the excessive growth of the ICO boom, ERC-20 tokens also created value for the network and spawned an almost unimaginable amount of alternative currencies.
In fact, by April of this year, according to InvestopediaMore than 18100 ERC-20 coins existed on the Ethereum blockchain.
In the Coin Metrics report, these coins were divided into three types: service tokens, which allow the bearer to receive services, for example, the ability to bet on forecast markets through Gnosis; exchange tokens, such as the BNB Binance token (he later transferred from Ethereum to his own blockchain of the Binance exchange); and everyone’s favorite stablecoins like Tether and DAI.
This last category is stablecoins, which have been the main contributor to the number of transactions made on Ethereum since mid-2018, the report says. You probably won't be surprised to know that Tether is the culprit. “USDT began to strengthen in May and now accounts for more than 80% of the transaction share of the top ten tokens,” the report says.
Flipping is just the beginning
All of these ERC-20 token-based transactions are slowly overtaking ETH-based transactions.
And last week it finally happened: “As of November 10, ERC-20 was making about 303 daily transactions versus about 000 for ETH,” the report says.
“While ERC-20 has been the dominant token type up to this point, we may be on the cusp of ERC-721 growth,” the report predicts. You may know this eye-catching protocol as the NFT standard that first captured the imagination of the crypto world with the fabulous Crypto Kitties.
NFT
New is the collectible digital card game Gods Unchained, which has become a hit. Users own their trading cards, which are unique and can be traded on the market, which is part of the game. “While Gods Unchained is still early, it could be an example of the real use of crypto tokens in games,” Coin Metrics concluded.
Indeed, after the controversy over the game that broke out in Hong Kong last month, she sold her Genesis Card Pack - and received about $6,2 million.
Coin Metrics notes that since the beginning of this year, “the number of deployed ERC-721 contracts has grown by almost 350%, compared to about 39% and 36% for ERC-21 and netoken contracts, respectively.”
However, Ethereum is not from the forest. Starting with Crypto Kitties, the blockchain network is struggling to keep up with demand and is moving to Ethereum 2.0which is designed to be faster and more scalable. The report did not express an opinion on a larger question: is the transactional popularity of stablecoins and NFT just a high-class problem?
If you understand anything, share your thoughts in the comments)))