Odaily Frontline | Why is DeFi hot, but Ethereum remains calm?

This article comes fromCryptoSlate, Originally by Shaurya Malwa

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This article comes from

, Originally by Shaurya Malwa

The ICO boom of 2017 was driven in large part by a huge spike in the price of ETH — scammers, aspiring technologists chose the Ethereum protocol to issue tokens and take some of the profits from the frenzy.

At that time, stablecoins available today were either unpopular or did not exist, meaning token holders had to sell their tokens for ETH or BTC and then convert them to USD to cash out.

The above, and others, have partly contributed to the narrative that “stablecoins kill Ethereum as a new currency option—both monetary and technical.”secondary title。

Messari analyst Ryan Watkins recently stated that there is no "immediate reason" why ETH must rise when DeFi tokens soar. DeFi has shown signs of I0-like returns in all aspects,say：

Some lesser-known tokens have even surged 10,000 percent in the past week

Qiao Wang, the former Messari product director, said as early as 2019 that stablecoins "killed" the "opportunities" for some platforms to be of great significance to benefit seekers. Watkins quotes Wang

"DeFi is 'To the Moon'. Why is ETH not moving? Simply put, there is no direct reason why ETH must go up with DeFi. Last year, Qiao Wang was one of the first to come up with the reason, he believes that the stable Coin (Crypto Dollar) allows investors to bypass native crypto assets like ETH for speculative purposes.”

Watkins pointed out that some DeFi tokens, such as Compound or Balancer, can be purchased directly from Coinbase or Uniswap for U.S. dollars, eliminating the need for an "Ethereum bridge" in 2017. as the picture shows:

ETH Utility Improvement

headdedAll is not lost for ETH. First of all, Watkins pointed out that the huge progress of DeFi applications, if viewed from a technical and institutional perspective, proves Ethereum’s “product-market fit”.

he

: "In the past two years, Ethereum has transformed from a piggy bank for ICO projects to a rapidly growing digital economy."

Watkins sayWatkins also stated that utility is the core driver of any currency. For example, the reasons why the US dollar is more valuable than the Venezuelan bolívar include overall utility, global acceptability, and fundamental value.

With key events like ETH 2.0 on the horizon, it doesn't look like Ethereum's utility will be replaced anytime soon.