DeFi can take Ethereum higher than 2017 bull run

Back in the day, when it first emerged, Ethereum (ETH) came with quite a promise. It was branded ‘The World Computer,’  with claims that it can do anything that can be coded. However, it never received one single thing that it needed to become an essential project, and that would be a killer use case.

Then, it finally happened.

Ethereum’s main use cases are a thing of the past

For a large portion of its history, Ethereum was mostly popular as a platform for developing new coins. Entrepreneurs had a dream of becoming the next Satoshi Nakamoto by using Vitalik Buterin’s platform to create their own tokens.

Most have already seen their project fail, or they ended up fighting lawsuits thrown at them by the US SEC.

Meanwhile, Ethereum was also offering dApps, especially when it comes to gambling apps and blockchain games like CryptoKitties. In fact, CryptoKitties became Ethereum’s largest app, being the first and only dApp that seriously clogged its network at some point.

So, CryptoKitties, gambling apps, and token issuing were Ethereum’s use cases. This was enough for the entire industry to start expecting that ETH might surpass BTC in terms of market cap. This is how strong a rally ETH had seen back in 2017. Of course, it never happened, but it showed that ETH has massive potential.

But, even so, one CEO argued that ETH has an even bigger ceiling — one that became available to it because of DeFi.

Ethereum’s new potential lies in DeFi

In the past twelve months, DeFi — as well as stablecoins — became a new trend on Ethereum. In fact, they became its new major use cases, and new game-changers for the network.

Around $7.3 billion in US dollars now sits locked away in Ethereum due to various stablecoins, such as PAX, USDC, and USDT.

This is why Ryan Selkis, the chief executive of Messari — a major crypto researcher and data provider — said that ETH has a higher ceiling than the one it saw during the bull run.

Of course, not everyone agrees with this. Stablecoins did become big on ETH, and that cannot be denied. However, some, like Ryan Watkins, believe that Tether’s USDT on Ethereum actually poses a threat to the project. He thinks the same of other cryptos that exist on the ETH network.

Short-term: Positive

Long-term: Threat

For ETH to defend its monetary premium, Ethereum must create demand for trust minimized applications that use ETH as collateral.

ETH must not devolve into its naive early branding of digital oil.https://t.co/EcmIJN0Psa

— Ryan Watkins (@RyanWatkins_) April 22, 2020

Selkis, on the other hand, remains optimistic, and expects that DeFi and stablecoins could improve Ethereum’s long-term prospects. Even so, he admits that this, right now, is the time for Bitcoin to shine, and not ETH. Still, given the popularity and potential of DeFi, their time will definitely come.