Xangle Research: Ethereum on-chain activity very similar to that recorded before the market boom in 2017

By Selena On Jul 27, 2020

According to the July report from Xangle Research on Decentralized Finance (DeFi) in Quarter-2 2020, research specialist Jehn Kim resolute that on-chain transaction capacity on the Ethereum blockchain augmented approximately 62%, about a 52-week high on June 23. Transaction costs also rose to around 688%. The analyst was renowned that these on-chain statistics partially resemble the spike seen during the bull run in 2017 – 2018 when Ethereum touched its all-time high price of $1,396.

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Are investors getting ready for Ethereum staking? Data from @nansen_ai shows that almost 120,000 @ethereum wallets are ready for staking. This number has grown by 13% over the past year.
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Xangle Research suggests on-chain activity may not be the best indicator to assess Ethereum

Kim said:

“Ethereum’s on-chain indicator activity needs to be reconsidered. ETH had only stretched $230 in Quarter-2 despite the same on-chain movement.”

As Kim presented, this activity is driven by widespread market attention and ICOs issuing billions of dollars worth of ERC-20 tokens. However, despite working on the same chain this year, Ethereum did not respond as well as 2018.

Source: Xangle Research on Decentralized Finance (DeFi) in Q2 2020

Kim said:

“The network’s on-chain indicator activity needs to be reconsidered as it languishes for $230.”

Source: Xangle Research on Decentralized Finance (DeFi) in Q2 2020

As the image above shows, the metrics for subtle new addresses, active addresses, and new networks are currently at the 2018 level. This shows significant user activity, retail interest, and create new Ethereum wallets.

Kim said:

“The above metrics can be attributed to the ongoing boom in Ethereum-issued DeFi tokens. Some of these include Yearn Finance and Compound, whose tokens have surged over 100x since their issuance. Many DeFi tokens are up triple digits on the year, and excitement around these projects is reminiscent of the early days of the 2017 ICO boom.”

The upcoming ETH 2.0 Serenity update could account for a large number of new wallets created

The wallets holding 32 ETH or more have hit an all-time high. The number is the minimum amount of ether needed to run a validator node on the upcoming network upgrade.

Reports suggest investors expect up to 9% of ETH-accrued interest on their initial staked capital. So far, the launch date for Serenity has not been released. Some rumors put it at a July launch, a point which Ethereum co-founder Vitalik Buterin shot down over Twitter.

At press time, over 120,000 wallets hold above 32 ETH. Such nodes that will replace the miners, such as Bitmain or AntPool, to validate transactions and maintain the Ethereum blockchain.

Besides, DeFi tokens and stablecoins are changing the landscape of the blockchain by driving transaction fees to two-year highs, which were more than those of Bitcoin for the first time. The number of daily transactions on Ethereum didn’t come close enough in Q2 to its ATH of 1,349,890, only passing 1,000,000 this year in late June.

It wasn’t until Q3 that some of the impacts of the addition of DeFi tokens and a rise in the popularity of stablecoins were felt on the blockchain. The Ethereum blockchain overtook Bitcoin’s for the first time in history to become the most used, having settled $508 billion in transactions for 2020 as of July 21.

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