Ethereum (ETH) – The Backbone of Smart Contracts and DeFi
Ethereum revolutionized blockchain by introducing smart contracts—self-executing code enabling decentralized applications (dApps). Today, it hosts 80% of DeFi protocols and 90% of NFTs, making ETH indispensable for developers and users.
The Merge and Sustainability
Ethereum’s 2022 transition to Proof-of-Stake (PoS) slashed energy consumption by 99%, addressing environmental concerns. Validators now secure the network by staking ETH instead of mining, with over 32 million ETH ($120 billion) locked in the Beacon Chain.
Scalability Solutions
High gas fees during peak usage remain a challenge. Ethereum 2.0’s sharding upgrade aims to split the network into 64 chains, boosting throughput. Meanwhile, Layer-2 rollups like Arbitrum and Optimism reduce costs by processing transactions off-chain. For example, Arbitrum processes 10x more transactions than Ethereum mainnet at 1/10th the cost.
DeFi and NFT Dominance
Ethereum’s DeFi ecosystem includes lending platforms (Aave, Compound) and DEXs (Uniswap), with over $50 billion in total value locked (TVL). NFTs on Ethereum, such as Bored Ape Yacht Club, have generated $30 billion in sales. The ERC-404 standard further merges NFTs with fungible tokens, unlocking hybrid use cases.
Future Outlook
Ethereum’s roadmap focuses on scalability, security, and sustainability. With institutional staking services and account abstraction simplifying user experience, ETH is poised to remain the backbone of web3.