📌 What is it?

#Ethereum — this is the second largest blockchain project by market capitalization, created in 2015 by Vitalik Buterin. Unlike Bitcoin, Ethereum is a platform for smart contracts and decentralized applications (dApps).

⚙️ How does Ethereum work?

  • Smart contracts are self-executing programs on the blockchain

  • EVM (Ethereum Virtual Machine) — the heart of decentralized applications

  • Proof of Stake (#Pos ) — since September 2022 (The Merge), abandonment of mining

  • Layer 2 solutions (Arbitrum, Optimism, Base) help scale the network

💼 Where is it used?

🔹 DeFi — Uniswap, Aave, Maker, Curve, Lido

🔹 NFT — OpenSea, Foundation, Zora

🔹 Games and metaverses — Decentraland, The Sandbox

🔹 DAO and tokenization — ENS, Gitcoin, Snapshot

🔹 Real sector — CBDC, real estate, insurance

✅ Advantages of Ethereum

  • The first and most powerful platform for dApps

  • A huge ecosystem and community

  • Support for institutional investors and developers

  • Switching to PoS — more environmentally friendly and beneficial for ETH holders

  • The fee burning mechanism (EIP-1559) makes ETH partially deflationary

❌ Risks and disadvantages

– Low Layer 1 throughput (≈15 TPS)

– High fees (gas fees) during peak periods

– Competition from Solana, Sui, Avalanche, Aptos

– Difficulty for beginners (wallets, fees, L2)

– Centralization of validators? — large players dominate staking

📊 Tokenomics$ETH

  • No capped supply (unlike BTC)

  • EIP-1559 introduced a mechanism for burning part of the fee

  • Staking (via PoS): validators receive rewards

  • ETH staking yield ≈ 3–5% per annum

  • With each burn, ETH becomes deflationary during active periods of the network

📈 How to earn on Ethereum?

🔸 Holding ETH as a base asset in the crypto market

🔸 ETH staking through Lido, Rocket Pool, EigenLayer

🔸 Participation in DeFi and farming on Ethereum

🔸 Investing in Layer 2 projects on Ethereum

🔸 NFT/ENS assets based on Ethereum

🧠 Conclusion

Ethereum is the foundation of Web3 and decentralized technologies. It is not just a cryptocurrency but a full-fledged infrastructure on which all DeFi, NFT, and #DAO -movement operates.

📌 Suitable for:

  • long-term investors

  • active DeFi users

  • holders and stakers

  • those who want to participate in innovative L2 projects

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