Ethereum development activity is declining compared to other cryptocurrencies such as Polkadot and Cardano The number of Ethereum holders continues to grow. Furthermore, network growth and daily active addresses are decreasing
According to recent data, Ethereum development activity has decreased compared to other cryptocurrencies such as Polkadot [DOT] and Cardano [ADA]. This drop could negatively impact Ethereum’s long-term prospects.
GitHub Weekly Development Activity:
#1: 383 Polka Dot / Kusama
#2: 351 Decentraland
#3: 273 status
#4: 264 Cosmos
#5: 247 Cardano
#6: 232 Ethereum
#7: 218 internet computer
#8: 189 Filecoin
#9: 183 Vega Protocol
#10: 173 Chain link pic.twitter.com/RuFsqr2E4s
— ProofofGitHub (@ProofofGitHub) January 8, 2023
A new proposal
However, there is hope on the horizon as development activity could increase as a result of the new proposal from Ethereum developers. The new Poseidon proposal includes the introduction of a new type of contract that uses Poseidon’s cryptographic hashing algorithm.
The new contract allows for different systems to work together and also adds more cryptographic hashing options to the Ethereum Virtual Machine. These include Ethereum Virtual Machine and zero-knowledge and Validity rollups.
In addition, this new contract could make it easier and cheaper to use zero-knowledge proofs and proof-of-reserves. These would be Merkle-based proofs on the Ethereum network.
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In addition, the number of Ethereum holders continued to grow. This was indicated by the fact that the number of addresses with 10 or more coins has reached an all-time high of 352,501 according to data from Glassnode.
Be aware of the statistics
While the number of holders continued to grow, Ethereum’s overall on-chain activity continued to decline.
For example, Ethereum network growth has slowed significantly over the past month. This indicated that there was a decrease in the number of new addresses transferring ETH for the first time. In addition, the daily active addresses also decreased.
However, despite these factors, the speed of Ethereum witnessed a huge spike. This indicated that the frequency with which ETH was traded between addresses increased.
Along with the growing speed, Ethereum’s market value to realized value (MVRV) ratio also improved. The MVRV ratio, which measures the gain or loss of most holders, has risen over the past week.
This meant that if most holders decided to sell, they would take a profit. However, the long-short divergence was negative, suggesting that many short-term holders were profitable. These short-term holders were more likely to sell their ETH holdings in the near future.
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It remains to be seen whether the decline in development activity and other factors will have a lasting impact on Ethereum’s value. At the time of writing, Ethereum was trading at USD 1,308.26 with a price increase of 3.61%.
This post Investors looking at ETH need to look beyond development activity to get a complete picture
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