Ethereum Audit

ethereum auditAdam Cochran has recently analyzed the top 10 000 ETH addresses (see the full report here). What did we learn from it?

 

Decentralization

The top 10 000 addresses hold 91.7 million ETH (almost 500 billion CZK). If we remove the smart contract addresses, we find that 56.70% of ETH (57.2 million) is held by the top 10 000. This distribution is similar to BTC (57.44% by top 10 000) and, in fact, it makes ETH and BTC the most decentralized cryptocurrencies. In comparison with other cryptocurrencies, for example, just 16 XRP addresses hold 55.2% of XRP and 300 Litecoin addresses hold 54.3% of LTC.

 

Staking with ETH 2.0

Even though the number of created ETH coins is 110,696,890 (at the time of the analysis), it was identified that roughly 9% of ETH is inaccessible (burned or lost) and there is actually only around 100 million ETH in circulation. This makes a huge difference when calculating the returns on staking the ETH 2.0, once the proof-of-stake rolls out. There is currently 65 million active ETH. When we remove the ones at exchange hot wallets and 80% of those in cold wallets, assume that 20% of ETH stays active in smart contracts and payments, and remove the lost, burned or locked ETH, it leaves us with 44.6 million ETH that can be used for staking. From this, it was estimated that in the early phase the ETH staking would yield 17% – 20% annual return and would drop down to 6% – 8% once staking services are more robust and available and eventually level of at 4%-6%.

 

ETH is being used

In the last 90 days, 16.2 million ETH has passed through a payment processor, payment gateway, or smart contract. In comparison to Bitcoin, where 57% has not moved in over a year (with 21% not moving since 2015), ETH is being used 440 times more. Meaning that ETH is more money and BTC is more as a store of value.

On top of that:

  • Whales are increasing their stake in HHT and new whales are funneling in
  • Miners are accumulating ETH
  • Ethereum founders still hold most of their ETH
  • Vitalik Buterin, the founder of Ethereum, donated 1 ETH to the ecosystem for each ETH he has sold and still has more the 50% of his holding

 

Things are looking good for ETH.

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