ETH network on track to process $1 trillion this year

23 Oct 2020

The Q3 DeFi boom has seen the Ethereum network process over twice the daily volume of Bitcoin.

As per findings from crypto market data aggregator Messari, the 30-day rolling daily average for Ethereum transaction volume currently stands at $7 billion at the time of writing, with Bitcoin processing under $3 billion.

Should the trend continue, Messari forecasts Ethereum will become the first public blockchain to settle $1 trillion in transfers over a calendar year, reports Cointelegraph.

Looking back, Ethereum’s last strongest calendar year in relation to Bitcoin was in 2018, when half a billion in volume was processed, 59% as much as Bitcoin’s $849 million during that year.

As it stands, Bitcoin is on track for its second-strongest year after 2018, forecast to process $800 million.

However, the DeFi (decentralised finance) bubble is happening on top of Ethereum-powered smart contracts, meaning the Ethereum network is now processing the volume of a whole sector, whereas Bitcoin – the world’s largest cryptocurrency by market capitalisation – in the main represents transfers of value denominated in Bitcoin.

Ryan Watkins from Messari assigns a lot of Ethereum’s volume surge to higher volumes of ERC-20 stablecoins, with most Tether transactions now happening on Ethereum.

Watkins goes on to indicate soaring on-chain liquidity from decentralised exchanges, with over $20 billion in volume generated from Uniswap and Curve last month. These exchanges now make up over 13.6% of total exchange volumes.

That said, Messari forecasts “the next twelve months could come to define the platform wars” in crypto, highlighting Ethereum’s ongoing high fees as an issue that rival blockchains will seek to resolve, as well as “the rise of parallel DeFi ecosystems.”

He added: “Look for all would-be ETH Killers to continue to empty out their treasuries to build a parallel DeFi sector throughout the end of 2020 and beyond.”

In August this year, Chris Burniske from PlaceHolder Capital stated that Ethereum and Bitcoin are in a race to hit the first $1 trillion market cap in crypto.