Research shows: Ethereum's overall adoption rate continues to grow

With Ethereum set to undergo a major upgrade in the coming months, the crypto community is closely watching the second-largest cryptocurrency's efforts to become the "world computer." A recent report shows that Ethereum's overall adoption rate continues to grow.

The Ethereum consensus mechanism is about to change to a Proof of Stake algorithm to improve its performance. However, due to continuous delays in the upgrade, it has faced skepticism from various sectors.

Meanwhile, a report titled "Evolving Ethereum Tokens" by the cryptocurrency analytics firm Coinmetrics indicates that the Ethereum network continues to grow, with on-chain transactions and smart contracts steadily increasing.

Token Valuation Growth

The report compares the market value of Ether with all tokens issued on the Ethereum network, showing that the total market value of ERC-20 tokens is catching up with Ethereum.

However, Coinmetrics also presents another perspective called the "Network Value to Token Value Ratio (NVTV)." This ratio calculates the Ethereum market value divided by the total market value of ERC-20 tokens, showing a steady decline in Ethereum's NVTV ratio. On April 1, 2019, Ethereum's NVTV ratio hit a record low of 1.57. As of November 10, the ratio stands at 1.90.

The report notes that the decreasing NVTV ratio indicates a continuous increase in Ether valuation, which is positive news for Ethereum.

There has been a significant shift in trading volume between Ether and ERC-20 tokens. In the third quarter of this year, ERC-20 trading volume surpassed Ether trading volume for the first time.

This is largely due to USDT, as USDT gradually transitioned to the Ethereum blockchain starting in May and now accounts for over 80% of the trading volume of the top ten ERC-20 tokens.

Overall Adoption Rising

The overall usage of Ethereum smart contracts continues to grow and recently reached a historical high, largely attributed to the blockchain card game Gods Unchained. With the continued development of smart contract economics, the importance of Ether in the ecosystem will continue to expand.

As Ethereum's upgrade progresses slowly and faces many excellent public chain competitors such as NEO, Cardano, EOS, etc., discussions about Ethereum being eliminated from the market continue to circulate.

However, Coinmetrics draws different conclusions in many areas of data. While Ethereum still faces scalability issues, they are expected to be addressed in the upcoming upgrade.

Compared to Bitcoin's ten-year development, Ethereum has made significant progress in its short lifespan in the cryptocurrency market. Coinmetrics believes that Ethereum will undoubtedly evolve further over time.

Related Reading

• The privacy browser Brave officially launches a reward program on its iOS version
• Chinese insurance giant OneConnect files for IPO in the United States, continuing to invest in the blockchain sector

Join now to receive the most comprehensive information on fintech, blockchain insights, and industry examples!