almost 3 years ago • 1 min
Surging interest in decentralized finance (DeFi), the growing network of tools that allow people to build financial products that don’t require a trusted central authority, helped push ether, the cryptocurrency on which most Defi projects are constructed, to a fresh record this week.
As the chart above shows, ether’s price in US dollars (in green) has exploded this year. In terms of bitcoin (in yellow), however, it still has a long way to go to return to the heady days of 2017.
Unlike bitcoin, whose primary function is financial speculation, Ethereum allows software developers to build apps that sit on top of its network – hence ether, Ethereum’s crypto token, grows in value with user demand for those apps.
Joseph Lubin, an early Ethereum employee, knows this well – which is why he’s spent some of his fortune on early-stage funding for a suite of Ethereum-based startups. The projects – grouped together under the ConsenSys umbrella – include Diligence, a blockchain security tool, and MetaMask, a crypto wallet. For a sign of how interest in DeFi is taking off, check out this chart of MetaMask users active at least once a month.
Crypto skeptics would point out that the main use case for tools like MetaMask is still financial speculation and that many people only download the wallet in order to bet on the price of crypto tokens. But if ConsenSys and the broader Ethereum ecosystem can keep attracting fresh users at this rate it’s likely to provide support to ether’s price.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.