The network becomes busier with the NFT trend on Ethereum

Ethereum is a coin with the second largest market capitalization in the Crypto market (after Bitcoin) and has a great influence on the DeFi market. Therefore, in this On-chain Microscope I will continue to analyze and make projections for ETH based on recent On-chain data.

Data from exchanges

Amount of ETH on the exchange

Data on the amount of ETH on exchanges shows that the current trend is sideways.

Specifically, the amount of ETH on the current exchanges increased slightly by 1% compared to the figure 2 weeks ago, and compared to the price drop from May 2021, the amount of ETH on exchanges It has decreased by 8% so far.

This equates to about 1.7 million ETH (~$4.1B at $2,400/ETH) that have been withdrawn from the exchange since May 2021.

This proves that despite the price decline, the demand for ETH in non-exchange activities is continuing to increase, these activities include:

• Use to trade or participate in DeFi platforms.
• Join Staking ETH 2.0.
• Or simply the need for long-term storage at a time when exchanges are exposed to huge regulatory risks that could make the assets stored on them less secure.

ETH Exchanges Netflow

In general, in the last 2-3 months, we have not seen ETH net loaded on the exchange much.

The proof is that as you can see, the number of columns facing down is much more than the number facing up.

Also, let’s focus on the details of the times when we see a lot of ETH being deposited on the exchange.

Most of the time when you see ETH being loaded on the exchange a lot is when the price has a correction. And looking at the trend of net withdrawal when the price corrects, we can see that the amount of ETH that is net withdrawn each time the correction is decreasing.

That proves that the possibility of selling in the future will decrease as investors become more and more indifferent to the short-term price corrections.

ETH 2.0 Staking

Next, I will analyze for you the data about the Staking situation ETH 2.0 to see how community trust in Ethereum is going?

Staking Ratio

This is the metric of the ratio of ETH Staking in Smart Contract ETH 2.0 to the total supply of Ethereum.

The amount of ETH put into Staking in the smart contract of ETH 2.0 continues to increase. Specifically, the staking ratio currently stands at 5.56%, up 0.12% from the last 2 weeks, when ETH price bottomed below $1,800.

However, the growth rate of staking ratio (I will illustrate more clearly for you in the staking inflow total section) is currently decreasing, the reason for this may be:

• The reward for staking ETH has now decreased quite a bit because it has also been about 9 months since the launch of ETH 2.0 staking.
• In addition, currently the amount of ETH staked has reached over 6.5 million, leading to the APY is only about 6.1% and may not be as attractive to investors as it was before.

Staking Inflow Total

This metric will tell you the amount of ETH participating in Staking in a specific time period.

Tracking data on the amount of ETH participating in new staking will clearly show that the downward trend is happening clearly.

In addition to the reason for the decrease in APY, it can also be explained by the fact that there are now signs that the market is active again, prices are increasing as well as transactions on the network are made more often leading to demand to participate in Staking ETH 2.0 declines.

Ethereum Network Metrics

Number of Transactions on the network

The number of Transactions on the network has shown signs of growth again recently.

Specifically, the number of daily transactions (7-day average) is currently reaching 1.25 million, up about 4.2% from a low of about 1.2 million in July 2021.

Number of active wallet addresses

The number of active wallet addresses on Ethereum has also grown again from the lows recorded in mid-July 2021.

Currently, the daily average (7D MA) has about 549,000 active wallet addresses, an increase of 17.4% from the bottom recorded in mid-July. Quite positive sign that activity on the Ethereum network is growing. vibrant again.

In terms of the number of new wallet addresses, the growth is not as above.

Currently, the average number of new wallet addresses created a day is 81,000, up 10.5% from 2 weeks ago.

Thus, with many ecosystems developing alongside Ethereum with cheaper and faster transaction fees, the demand for Ethereum seems to come from older users more.

Gas Fee

Level Gas Fee followed by a slight increase.

The average number to execute a transaction on Ethereum is $7.89 (a nearly 50% increase from the mid-July period when the average transaction cost only $5). In addition to the increase in the price of ETH, the recent increase in Gas Gwei is also the reason for the sharp increase in Fee.

As you can see, the current Gwei Gas level in the first 2 days of August 2021 is moving at the 20-40 mark (sometimes even up to more than 80).

Another interesting piece of information is that if the Gwei Gas level is maintained as it is, it will be updated EIP-1559 In the near future, the amount of ETH burned every day will be about 2,000 – 4,000 ETH (according to Ultrasound.money).

That equates to 730,000 – 1,460,000 ETH burned every year. Compared to the current inflation rate of about 4.2% (~4.9 million ETH per year), it has not caused the ETH network to deflate, but it has also contributed to nearly a quarter of annual inflation (not to mention a higher gwei gas level will makes the amount of ETH burned will be larger).

NFT makes the network more vibrant ahead of EIP-1559

NFT and Play to Earn are very hot topics in recent times and it is also one of the reasons why transactions on the Ethereum network become exciting again.

Top Gas used by smart contract

As you can see in the smart contracts on Ethereum that used the most Gas in the past 30 days, the Top 2 and Top 3 belonged to Ronin Bridge of Axie Infinity and OpenSea – The largest NFT Marketplace platform on the market today.

The amount of ETH used as transaction fees via Ronin Bridge has not shown any signs of cooling down.

Even the number of Gas Fees has continued to increase to reach ATH recently, despite Trend NFT and Play to Earn having been going on for a while.

OpenSea also showed a similar situation when the amount of Gas Fee increased even near the peak in March 2021.

Thus, with the continuous and unrelenting growth of NFT on Ethereum, Axie Infinity and OpenSea have made the network more vibrant.

CryptoPunk and some other NFT Collectibles

In addition to Axie Infinity and OpenSea, some NFT collections are also the reason why the Ethereum network has even been congested in recent times.

The first is CryptoPunk – this is an early NFT game, developed before the CryptoKitties that once caused a “storm”. In recent times, with the development of Trend NFT, these “Old schools” have had outstanding growth.

Some statistics from Dune Analytics (you can see the details here) showed the hotness of Crypto Punk:

• Selling Price averages up to over 50 ETH for a Punk (more than $100,000).
• Weekly Volume reaches ATH up to nearly 50,000 ETH.
• The highest NFT sold for 4,200 ETH (over $10M).

There is also quite interesting information that the keyword Crypto Punk is up again Twitter top trending in Business and finance.

Besides Crypto Punk Stoner Cats NFT Also a hot topic this past week. This project is attracted by the presence of Vitalik Buterin dubbing an animated product that must be viewed by Stoner Cats NFT.

With that characteristic, it is not surprising that the demand for owning NFTs is very large, these NFTs are sold out within 35 minutes, and one of the reasons for such “slow sale” is that Gas Gwei is being sold. pushed up very high, causing Transactions to fail frequently.

Gas Gwei levels also peaked at 1,500, causing the network to become congested.

Some of my personal thoughts

For me, NFT is like an abstract painting by a famous artist, it can be extremely valuable to collectors and art connoisseurs. Or simply scribbles and have no meaning or value.

Compared to Crypto Punk or Stoner Cats, why is the demand for them so high? In my opinion, there are 2 main needs:

• The needs of true collectors (or equivalently, those who are knowledgeable about art have an understanding of the meaning of the work in their above example).
• Speculative needs: They are traders who recognize some special features such as Vitalik Buterin’s voice in NFT, they will buy first and resell to people with real needs who want to own at a higher price to make a profit.

The need for speculation is completely understandable, but what about the need to collect? Surely you all see it as something abstract and difficult to understand just like the paintings in life.

However, if you compare Crypto Punk or Stoner Cats with a work of art, a collection of ancient coins or ancient artifacts, this is completely understandable:

• Crypto Punk is the first NFT project that marks a great deal for the development of Ethereum as well as NFT (similar to Renaissance paintings or antiquities) of great historical significance.
• Or for the Stoner Cats, it’s like a basketball fan owns a pair of shoes signed by Lebron James or Michael Jordan, they are both very valuable to them.

However, the problem you need to expand beyond that:

• Like the example I mentioned above, basketball or the Renaissance is something that will last forever in history, or at least people believe in it. And the marks it leaves (like a painting or a basketball legend’s shoes) will always be worth even increasing over time.
• And the same goes for mapping via Crypto Punk or Stoner Cats. With Ethereum’s unique properties and belief in permanence, collectors own it in addition to the need of a Collectible as well as a future store of value.
• In addition, through this, it can also be seen that Crypto is gradually entering popular culture.

In short, through the need to own the OG Ethereum Artifacts such as the increase in Crypto Punk is demonstrating the market’s confidence in the long-term development of Ethereum in particular and Crypto in general.

summary

So, after analyzing the On-chain data about ETH, I can give you some conclusions as follows:

• The number of ETH on the current exchange, although not continuing to decline, is still maintaining a low level. Data on ETH deposits on exchanges also shows that selling seems to be waning and investors are also becoming more indifferent to short-term price movements.
• The number of ETH participating in ETH 2.0 Staking continues to increase, but the growth rate is decreasing. The reason may be due to the demand for ETH to participate in the DeFi market as well as the current APY level is decreasing.
• Trend NFT has greatly contributed to making the Ethereum network vibrant again.
• In addition, the demand for owning OG NFTs on Ethereum like Crypto Punk also shows that the market’s confidence in the long-term development of Ethereum as well as Crypto is increasing.

Hopefully the article has provided more perspectives on ETH On-chain data. I hope this will be a useful reference source in your investment.

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