Ether Looking Cheap Versus Bitcoin, MakerDAO Losing Dominance

Good morning defiers! Here’s what’s interesting in the intersection of blockchain and finance today:

  • Ether is looking cheap

  • MakerDAO is losing market dominance

  • The lottery with no losers went open source


Ether Rarely is This Undervalued Versus Bitcoin

The digital gold versus digital oil fight is looking pretty dark for ETH right now.

Ether has been climbing with the rest of the cryptocurrency market, piercing through $300 last week for the first time since September and climbing above $330 today.

But while Ethereum’s cryptocurrency is up almost 25 percent this month, bitcoin has rallied twice as fast, pushing the bitcoin per ether rate to 0.027, the lowest since May. That was only last month and doesn’t sound that impressive, but in the past two years BTC/ETH has slipped below 0.028 only four times: Briefly in December 2017, for about three weeks in December 2018, briefly in May, and now.

That’s not saying anything about fundamentals, but just looking at technicals, it seems that ETH should be due for a catchup soon.

About fundamentals, address growth, transactions and gas used per day are all picking up, with total daily gas used near a record (gas is used to pay for computation in the Ethereum network). To dig deeper into the value of ETH, recommend reading this post by EthHub’s Anthony Sassano .

The growth of decentralized finance should boost ether because increasing activity in the network means more gas is being used, and that of course, is paid with ether. Also, DeFi protocols rely on users locking up ETH as collateral to get leverage, which is mostly used to buy more ETH.

While that could be a long-term driver for ether if you believe DeFi will keep growing, the amount of ETH locked in these platforms has been sliding since April, so it shouldn’t be an immediate catalyst for a rally.

DeFi Charts Are Getting More Colorful

Just one or two months ago, any decentralized finance chart you looked at was dominated by one color and tiny slithers of other hues. The one big chunk would always correspond to MakerDAO. But that’s starting to change.

Take monthly collateral added. For the first time, other decentralized lending platforms are about to surpass Maker, which has added around $27 million of users’ funds in June, compared with more than $34 million for Compound v2 and dydx, according to LoanScan. Maker accounts for 27 percent of total value locked so far this month, also the lowest share ever.

Colorful charts mean there are more options for users, but also that there are more options for the platforms themselves to integrate each others’ features –one of the most interesting trends in DeFi so far this year. That diversification has been coupled with growth, a sign the system is maturing.

Growth has been choppy though, after parabolic gains at the end of last year. It will be interesting to see what a bull market does to these platforms. Will people want to lend and borrow, or will they forget about all this and just go play in the crypto casino?

Lottery With No Losers Went Open Source

Quick update about Pool Together, the no-loss lottery I included in yesterday’s Defiant: The project was praised all over the crypto community until people found out it committed the cardinal crypto sin of keeping its code closed. Crypto Twitter wasn’t shy about letting the founders know why that’s not ideal and was so convincing, Pool Together ended up opening its code. Conclusion: Gotta love crypto Twitter. And Open Source :)


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