Cryptographic venture fund giant Andreessen Horowitz (a16z) emphasized that Ethereum’s development and demand is “unmatched” despite the high transaction fees of the network.
However, given that Ethereum prioritizes decentralization over scaling, the company warns that “popularity is also a double-edged sword,” and competing blockchains “better performance and lower rates.” “Promise” is robbing the market share.
Comments were made through a blog post introducing a16z’s 2022 “State of Crypto” report. The company’s data scientist, Daren Matsuoka, is Head of Protocol Design and Engineering and Eddy Lazzarin. General Partner Chris DicksonAnd content director Robert Hackett will work together to provide five key points from the survey.
Other than Ethereum, the report focuses on topics such as Web3 development, cryptocurrency adoption, decentralized finance (DeFi), and Stablecoin.
Introducing the 2022 cryptographic status report for a16z
There have been many changes since we started investing in crypto almost 10 years ago.
— A16z (@ a16z) May 17, 2022
According to the data in the report, Ethereum outperforms its competitors in terms of builder interests. The network has 1,000 second-ranked Solanas (SOL), while there are about 4,000 monthly active developers. Next, Bitcoin (BTC) and Cardano (ADA) are lined up at about 500 and 400, respectively.
“Ethereum leads have a lot to do with their early start and the health of their community,” analysts said, but despite high transaction costs, development continues to skyrocket on the network. I emphasized the importance of that.
“Ethereum’s overwhelming mindshare helps explain why users are willing to pay an average of $ 15 million or more per day just to use the blockchain. Such a young project. It’s worth noting. “
Ethereum demand can also be seen in the overall estimated transaction fees for reports paid on the blockchain over a 7-day average (calculated as of May 12), with data showing that Ethereum accounts for $ 15.24 million. increase. In contrast, BNB chains, avalanches, phantoms, polygons and solana together cost about $ 2.5 million.
The report points out that Layer 2 scaling solutions are fighting to bring Ethereum fees go down It also points out that at the same time as it accelerates transactions, it will bring the long-awaited upgrade to Ethereum to build the network. More efficient and cost effective..
However, the “long-awaited” upgrade cannot be performed immediately. In addition, a16z highlights in its report that, on average over 30 days (as of May 12), active addresses and transactions of competing blockchains such as Solana, BNB chains and Polygon already exist. .. It’s far more advanced than Ethereum.
The data shows that Ethereum has 5.5 million active addresses and 1.1 million transactions per day, while Solana has 15.4 million active addresses and 15.3 million transactions per day. The BNB chain ranks third with 9.4 million and 5 million, while the total polygons are about 2.6 million and 3.4 million. Analysts have concluded that it is not a winning situation.
“Blockchain is a new computing wave hit, with PCs and broadband in the 90’s and 2000’s, and mobile phones in the last decade. There’s plenty of room for innovation and multiple winners. I believe. “
Other important points from the report are that the total value of the DeFi sector will be locked to about $ 113 billion, making it the 31st largest bank in the United States, and Web3 adoption will reach 1 billion users by 2031. It could be a blow, and NFTs have generated $ 3.9 billion worth of revenue for creators. so far.