- Alex Svanevik based Nansen, a blockchain analytics platform that tracks over 100 million ethereum wallets.
- He informed Insider excessive fuel charges have brought about “vital issues” for ethereum this yr.
- We break down six ethereum-rivalling blockchains that might appeal to new customers subsequent yr.
Ethereum has been one of many most important crypto winners of 2021.
The second-largest cryptocurrency by market capitalization’s native token, ether, has surged in worth by over 500%, from $730 to simply underneath $4,600.
Blockchain knowledge analyst Alex Svanevik pointed to the rise of NFTs as one cause for the ethereum rally. Ethereum was the primary blockchain to host non-fungible tokens – primarily, digital collectors’ objects – and ether is essentially the most widely-used cryptocurrency for NFT transactions.
“NFTs must be the largest theme of 2021,” Nansen’s chief govt informed Insider in a current interview. “They have been an enormous catalyst for bringing individuals into the crypto house, together with those that’d by no means engaged with the ideologies of crypto and decentralization earlier than.”
Nansen, which Svanevik co-founded in 2019, analyzes on-chain transactions from over 100 million ethereum wallets.
“We’re a blockchain analytics platform for crypto merchants and traders,” Svanevik mentioned. “We examine just about any sort of software or blockchain asset – that is NFTs, DeFi protocols, stablecoins, even dog tokens.”
However ethereum has had its issues this yr as nicely. Customers have criticized excessive transaction prices – also called fuel charges – and blockchains like solana and avalanche have emerged as credible rivals.
“One vital downside for ethereum this yr has been excessive fuel prices,” Svanevik mentioned. “Naturally, there is a spillover impact onto the opposite chains.”
“Various chains have gained a number of traction, and a few of them have hundreds of thousands of customers at this level,” he added. “I feel you may proceed to see that world strengthen.”
Svanevik recognized six layer-one and layer-two blockchains that might rival ethereum in 2022. Some crypto analysts have used the time period ‘ethereum killers‘ to explain these options.
Avalanche is one layer-two blockchain to look at, in keeping with Svanevik. Its native token, avax, has soared by over 50% since Ava Labs introduced a partnership with Deloitte in mid-November.
“Ethereum try to be the world’s largest laptop,” Ava Labs’s president, John Wu, informed Insider in a recent interview. “They’ve had a head begin, however their know-how is not nearly as good – if they do not implement upgrades, they’re going to find yourself being MySpace or Friendster, fairly than Fb.”
Svanevik pointed to Binance Good Chain (BSC) as one other risk to ethereum’s dominance. BSC is another DeFi platform managed by the main crypto alternate Binance.
Fantom and polygon are two different potential layer-two ethereum killers, in keeping with Svanevik. Their respective native tokens, FTM and MATIC, have every risen by over 12,000% this yr, as altcoins ate into bitcoin and ethereum’s market share.
“The rise of the multi-chain universe might be an enormous theme in 2022,” Svanevik informed Insider. “The run-up in worth for avalanche’s token has coincided with the rise of fantom and polygon, and you might argue there is a correlation with BSC as nicely.”
Amongst layer-one blockchains, Svanevik pointed to solana and terra as ethereum’s most important threats.
Solana has maybe emerged as ethereum’s largest rival this yr, rising to change into the fifth-largest cryptocurrency by market capitalization and providing another blockchain for internet hosting NFTs. Its native token, sol, has soared over 15,000%, rising in worth from $1.51 to $238. Terra’s luna token has risen by simply over 10,000%.
“These blockchains have decrease fuel charges, increased throughput, and shorter block instances,” Svanevik mentioned. “They’re among the most important ones the place we have seen exercise progress.”
However Svanevik famous there’s not at all times an alignment between a token’s worth and its blockchain’s use case, pointing to cardano’s ada token and XRP. He mentioned these cash proceed to take pleasure in recognition with retail traders regardless of their restricted technical purposes.
“You possibly can see sure tokens operating up in worth with out a lot exercise,” he mentioned. “Cardano’s the prime instance – you may’t actually do something on cardano aside from stake your tokens, however the worth has exploded and it is one of many highest
cash on the market.”
“Token costs are way more uncorrelated than you’d suppose,” Svanevik added.