Market Cap Differential Of ERC-20 Over ETH Reaches All-Time High

With ERC-20 market capitalization, as well as the transfer value, continuing to gain momentum, the economic metrics of the Ethereum network continue to strengthen.

More ERC-20 By Market Cap Than ETH

Santiment, an on-chain analytics platform, has revealed research that shows that the total market cap for Ether has been overtaken by the aggregate of all ERC tokens within the Ethereum network, itself.

As it stands now, Ether’s market cap stands at around $41 billion in total. However, the total market cap for all of the network’s ERC-20 assets has reached $46.7 billion, overtaking the original cryptocurrency.

An Ongoing Trend

This year alone has already seen a handful of brief “flippenings,” with the longest-lasting one having occurred back in July. With the price surge in Ether that occurred back in August, the market cap surpassed the $50 billion mark. However, the subsequent correction has resulted in the ERC-20 tokens managing to surpass it once more.

Of all the ERC-20 tokens by capitalization, a large portion of it is contributed by the Tether (USDT) stablecoin. Around 60% of the entire supply of USDT is located within the Ethereum network, according to the Tether Transparency Report. This, in turn, stands at $8.9 billion in USDT.

Contributing Factors

The DeFi space can be greatly attributed to the massive market cap increase of ERC-20 token, with yield farming within the space causing a massive influx of new ERC-20 tokens to enter the market.

With a combination of USDT and DeFi, the economic activity was driven upon Ethereum by such a degree, that the seven-day average adjusted transfer value had been recorded higher than that of Bitcoin. This stands as the first time this had happened since early 2018, when the ICO boom was in full swing.

DeFi Causing Great Growth (And Problems)

CoinMetrics, a crypto analytics firm, had reported that on the 5th of September, 2020, Ethereum managed to achieve $3.08 billion in transferred value, as opposed to Bitcoin standing just behind it with $3.01 billion in total.

With the launch of passive earning opportunities for holders of Ethereum, particularly Yearn Finance’s yETH vault, economic activity has been added to the network at large. As it stands now, there is 220,000 ETH locked in the yETH vault, being valued at around $80 million in total. This, in turn, has earned an estimate of 28%, as per the states of Yearn itself

With so much activity on Yearn, as well as popular DeFi protocols such as SushiSwap, the transfer value of Ethereum has been driven skywards. However, the same accounts for the network fees, as well, causing a bit of a crisis within the Ethereum network.