Ethereum is a smart contract blockchain that aims to create a safe, decentralized environment for all sorts of applications. Decentralized finance (DeFi) and non-fungible tokens (NFT) have risen to prominence in the last year, demonstrating the potential of blockchain technology. However, scaling technologies that can enhance performance in reaction to changes in processing needs are beginning to unleash Ethereum’s enormous potential, and its co-creator, Vitalik Buterin, has his sights set on decentralizing social media, gaming, government, and other areas.
In its early stages, Ethereum has mostly used as a platform for trading and lending crypto assets through Aave or Uniswap, as well as purchasing and selling digital art through OpenSea. Second-layer platforms developed on top of Ethereum, such as Arbitrum and Optimism, as well as technological solutions like ZK rollups, will lower transaction fees and make Ethereum more accessible to decentralized social media networks like Reddit. The necessity for consumers to possess and spend Ethereum’s native asset, ether, will run through all use cases. When it comes to installing new apps, utilizing existing applications, or moving tokens between wallets, Ether is the key to unlocking blockspace on the Ethereum network. What gas is to a car, the native asset is to the network. Blockspace customers purchase and burn the asset to participate in the digital economy after EIP 1559. Decentraland. ETH will be used to stake and safeguard the network in the near future. ETH has become a unit of account and the most prevalent pairing on decentralized exchanges as a result of its use as a gas (DEX). If Ethereum, alternative base layer protocols including Avalanche and Solana, and “the metaverse” succeed, the meaning of money will go well beyond its current currency limitations. Protocols are already raising funds, and investors are valuing their holdings in ether rather than dollars or even stablecoins (tokens pegged to the value of a fiat currency). The usage of ether as money, on the other hand, does not invalidate fiat, stablecoins, or other forms of money. Sanbox. It’s just a supplement – and one that has the potential to become a metaverse currency. Crypto assets, like as ether, are still considerably more responsive to demand than stablecoins and dollars, making them a better long-term investment than a currency (for now). The currency ETH, on the other hand, improves as the Ethereum ecosystem increases. Speculators now outnumber genuine blockchain users, but this is changing as ether is being utilized for DeFi, social media, NFTs, validation and more. In fact, according to Coinbase’s Q3 financial report, the business has observed a significant shift in customers using blockchain technology by removing their tokens from exchanges. Many reports have shown how on-chain users have increased in tandem with new Coinbase accounts, Sandbox indicating that consumers are truly interested in interacting with Ethereum apps. Alternatives to the Ethereum mainnet, or live version, have gained even more appeal, with Polygon doubling the number of active users on the mainnet in a single day in early October. Furthermore, Arbitrum has 275,000 consumers who are seeking for cheaper blockchain interactions. Asset tokenization and interoperability with DeFi apps are only getting started in creating open, tradable marketplaces for formerly illiquid assets. Assets that may be exchanged against one other, used as collateral, or instantly delivered to any part of the world begin to act more like money than property or stores of value. The Web 3 workforce has shown interest in being paid in token equity rather than stablecoins, according to Julien Bouteloup, founder of Stake Capital and key developer at decentralized exchange Curve. Employees are likely genuinely interested in being owners of the projects on which they work, even if this is a side consequence of the bull market and growing prices. Play-to-earn gaming is only getting started, but Axie Infinity, a Ronin-based NFT game, is already raking in billions of dollars every year. Users all around the world live off the game’s profits, with earnings accounting for a significant portion of the Philippines’ GDP. Gaming and economics are becoming increasingly intertwined, showing just one facet of a more digitalized society. If current trends continue, today’s generation will be more financialized than it has ever been. Decentraland. It’s too early to say if this will be a net advantage for humanity, but crypto and DeFi have shown the benefits and drawbacks of tokenization. Airdrops and stock distribution (done right) have historically distributed money far more freely and equally than corporations. Scams and exploitation, on the other hand, demonstrate how avarice may be amplified by the anonymous economy and tokenization. For better or worse, as the digital economy evolves, the concept of money will get murkier, just as it did with the invention of credit cards and online payments, as well as the move away from physical money. This fits wonderfully with the metaverse’s story, in which the divide between the digital and actual worlds gets more blurred.