Increase in DeFi activity
There is approximately $84 billion in total value locked (TVL) in DeFi protocols, and the Ethereum network accounts for most of that with over $53 billion in TVL. However, Ethereum’s dominance in DeFi has been challenged recently with the rise of Ethereum-killers such as Cardano, Solana and Polkadot.
All of these newcomers compete with Ethereum by offering faster transactions and a lower carbon footprint. With Ethereum 2.0, the network will be more scalable, which will eliminate the problem of network delays and high transaction fees.
After multiple successful tests on the network, we should expect to see more DeFi protocols being developed on Ethereum, increasing the level of this activity on the network.
Ether (ETH) price increase
The latest news regarding the final timeline was announced by developer Tim Beiko, which triggered a spike in Ethereum prices. For a long time, Ethereum was the alternative to Bitcoin when transaction fees were skyrocketing on the latter network.
We now expect the same to happen again in September, which could trigger the “ flipping » so anticipated. This is a situation where Ethereum overtakes Bitcoin’s market capitalization dominance, which may well be possible with the launch of Ethereum 2.0.
We already know that institutional investors see more potential in Ethereum than in Bitcoin, and more investment could ultimately tip the scales in favor of Ethereum.
Reduced energy consumption
Cryptocurrency mining consumes a lot of electrical energy. It is estimated that Bitcoin consumes 150 terawatt hours of electricity per year, compared to 112 terawatt hours for Ethereum. The energy consumption of the global Ethereum machine is comparable to that of the Netherlands and higher than that of the Philippines or Pakistan.
Ethereum 2.0 reduces electricity consumption by 99%, which would significantly decrease the carbon footprint of the network. This will be a good thing not only for energy-starved countries, but also for the environment, which has suffered from the use of fossil fuels to generate electricity.
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Alm Maye has been a trader and analyst since 2013. He is an expert in equity markets, Forex and cryptocurrencies. He is the creator of Almvest.com and Imveste.com, two sites dedicated to personal finance. He participates in the development of feature articles on specialized sites such as Actions-boursieres.fr, as well as the international network of Finixio.com.