DeFi Boom Helps Push Ether To Record High

DeFi Boom Helps Push Ether To Record High
Andrew Rummer

almost 3 years ago1 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. 

Growth in MetaMask users
(Source: MetaMask)

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.

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