Important update in Ethereum system week 19/2022
- Optimism launched the native token OP and the Stimpack ecosystem development fund.
- The Merge is expected to take place at the end of Q3/2022
- Terra (LUNA) BANK RUN and its influence on the Ethereum ecosystem
- Yuga Labs Launching Otherside Metaverse Event
Analyze each piece of the puzzle on Ethereum
Ethereum Layer 2
L2's Total TVL has remained on the sideline since peaking in Q4/2021. The level of usage on Rollup platforms has not changed much compared to a few months ago. Up to now, the amount of ETH burned by L2 smart contracts only accounts for about 1% of network usage (since EIP-1559 was applied to Ethereum mainnet) when compared to other usecases such as DeFi, NFT, and MEV.
The scalability of Rollup platforms has a lot of room to grow, here are the top 5 Layer 2, sorted by TVL:
- At the top is Arbitrum with a TVL of $2.75 billion.
- In second place is dYdX with a TVL of $1 billion.
- In third place is Optimism with a TVL of $491 million.
- Ranked in 4th and 5th place are Loopring and Metis respectively.
Additionally, two weeks ago, Optimism launched the network's native token, the OP token , and used 19% of the total OP supply to retroactive the users of the ecosystem. Later, Optimism also announced an incentive fund called Stimpack 230M OP to encourage developers to build on the Optimism ecosystem .
Stimpack will promote the development of the Optimism ecosystem by airdropping to builders who have made a great contribution to Optimism. Each project on Optimism will receive an OP airdrop corresponding to the amount of TVL and the total number of transactions their dapp can make on Optimism.
The Merge is expected to take place at the end of Q3/2022
The 3rd test of The Merge Ethereum Mainnet was successful on 6/5 and there were no major issues. Next will be The Merge 's Public testnet . If nothing major happens, the event The Merge will take place shortly after. According to many Ethereum developers predicting, The Merge could take place by the end of Q3/2022.
There are currently over 12.5 million ETH staking in the Eth2 Deposit Contract, their value is over $30B at the moment. On average, each day will be about 50,000 ETH deposited into the Eth2 Deposit Contract, at the current price, this number is equivalent to 130M.
It is understandable that Ethereum developers are wary of Merge because it is currently the most active and TVL platform. It is estimated that the Ethereum network is securing $6,000B in asset value. If The Merge is not well prepared, it is easy to create a blackswan phenomenon in the current market context.
Yuga Labs Launching Otherside Metaverse Event
During the Otherside Metaverse event, Yuga Labs sold NFTs at a fixed price of 305 APE and limited to 2 NFTs per wallet. Essentially, Yuga Labs sold something for much less than users were willing to pay. So people were bidding against each other to get it before it sold out.
As we all know, Ethereum mainnet provides the most decentralized and secure space currently. That means the space to operate on Ethereum is precious and becoming increasingly expensive for end users.
As a result of the Yuga Labs launch of Otherside Metaverse, the Ethereum network was severely congested, as the picture shows, this event burned nearly 56,000 ETH, equivalent to more than 140 million USD.
In addition, the Otherside Metaverse also causes the APE price to increase twice before the mint event and gradually decrease during the genesis mint Otherside event. Besides, the NFT price of Otherside also peaked, with a floor price of 5 ETH.
Obviously Ethereum is not designed to make things work, it is better suited for large value transactions. So, the launch event of Otherside caused a lot of controversy, Yuga Labs was intending to move APE to another network, not sure which blockchain platform they will choose, here are 4 prominent options in the market. present with each option has its own pros and cons;
- New EVM Sidechain.
- New L2.
- Avalanche Subnets.
- Cosmos Appchains.
Terra (LUNA) BANK RUN and its influence on the Ethereum ecosystem
One of the top algo stablecoins by market cap collapsed this past week. In any stablecoin design there are usually 2 main risks:
- Payment risk.
- Payment risk.
In the design of Terra (LUNA) , their stablecoin solves the payment risk problem by allowing users to exchange 1 UST for $ 1 worth of LUNA via Oracle prices provided by the network's validators. . The user can then sell the LUNA to other assets that the user wants.
What we see is that UST's liquidity risk is secured primarily by LUNA's liquidity. This is the crux of Terra's system (LUNA). In an event where the liquidity of UST & LUNA was exhausted, the Terra system (LUNA) fell into a negative feedback loop causing the whole system to collapse.
Terra Ecosystem (LUNA) is one of the fastest growing ecosystems in the market. LUNA & UST are no longer limited to their own ecosystem but have extended their impact to external ecosystems, among them the DeFi ecosystem on Ethereum.
In the event of Terra (LUNA), the stable Pool on Curve seems to be the most affected, the liquidity on the relevant UST pools is exhausted.
The wave of fear also extended to seemingly unrelated projects, such as the group of liquid staking, stETH/ETH, rETH/ETH projects with peg deviations leading to mass divestment due to fear of being liquidated.
In addition, DeFi projects deploying capital on Anchor have not been counted yet. Up to now, the scale of damage of UST to the ecosystem in general and the Ethereum ecosystem in particular has not been fully calculated.
Conclusion
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