The long green candles of BTC and ETH lit up the markets and brought hope to the crypto community.
Last night, some news from the SEC significantly increased the chances of an ETH ETF being approved, causing ETH to skyrocket.
If the ETH ETF is successfully approved, ETH ecological projects will also benefit, and the gains could exceed ETH. So we should focus on it.
In the ETH ecosystem, there are some of the biggest sectors and projects:
Layer2
Main projects: ARB, OP, STRK, METIS, MANTA
As ETH aims to become a global computer, Layer2 is accused of using high TPS and low GAS to shoulder the prosperity of the ETH ecosystem. Its importance and value are obvious. At the same time, Layer2 is the sector with the highest market capitalization in the ETH ecosystem.
However, most projects are also typical of recently criticized institutional currencies with low circulation and high FDV. ARB, OP, STRK are three of the four kings and their FDV has exceeded 10 billion USD.
ARB has the highest TVL and largest number of Dapps among all projects. However, arb's price pump is relatively weak and has had a large number of unlocks recently.
OP's advantage lies in the super-chain ecosystem formed by the OP stack, which brings together a large number of excellent projects and capital sources. History shows that OP's price pumping force is stronger than ARB's, this may be due to the priority of investment funds.
STRK is layer 2 of zk core, and the ecological and user recommendations are not as good as the previous two coins. However, its circulating market capitalization is lower than ARB and OP, and it has been trending down since its listing without a significant recovery
Metis was a hot topic a while ago. It experienced a major price drop after listing on Binance.
Manta is a representative of layer2 created according to the module model. The team works very hard, the projects in the ecosystem are growing very quickly, and the circulating market capitalization is only 400 million USD, the lowest among them.
2. LSD
Main projects: LDO, SSV, PRL
The LSD protocol is mainly a node-related staking service that appeared after ETH upgraded from POW to POS (Proof of Stake). LDO is the largest service provider, with the highest TVL across the network and a circulating market capitalization of $2 billion.
SSV is an infrastructure configuration for distributed nodes, and its recent performance has been quite good.
3. Defi
Main projects: Pendle, UNI, AAVE, COMP, CRV, MKR
DeFi is probably the most familiar to everyone. As the biggest area of innovation in the last bull market, DeFi adoption has spread to every aspect of daily life on-chain. Core players include UNI, AAVE, COMP, CRV, MKR,... representing DEX (decentralized exchange), lending, stablecoin trading, stablecoin issuance,...
As DeFi has become mature, this cycle is mainly based on previous upgrades and the level of innovation is not high enough. Pendle is a relatively innovative project, it separates tokens into principal and interest to trade future profits. Pendle was also affected by the compound growth of TVL and coin price some time ago.
4. Stablecoin based on ETH collateral
Main projects: ENA, LBR
There are many ways to issue stablecoins. One of them is issuance with collateral, and the largest collateral is without a doubt ETH. After LSD and Restaking, the project side will use collateral ETH to gain profits from liquidity. Such stablecoins have a natural rate of return. At the same time, the project side will conduct a number of token incentives, as well as dividends from minting and borrowing..., so the annual profit will be very significant.
The famous LBR in 2023 is one of them. Binance's launchpool project this year is Ena is similar. Ena uses hedging derivatives positions to maintain the value of collateral.
Ena's TVL is as high as US$2.5 billion and its current outstanding market capitalization is already US$1.3 billion.
5. Restaking
Main projects: REZ, ETHFI
Restaking is what I appreciate the most in this ETH round for two reasons:
