Cryptocurrency

Which Ethereum Killer? On-chain data shows that competitor networks are still lagging behind

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Ether (ETH) remains the second largest cryptocurrency and dominates the smart contracts industry according to a range of network usage metrics. Although the network has been overwhelmed by peak activity causing median fees to exceed $ 10, the network effect of its large user and developer base appears to be sufficient to maintain its position as a secondary cryptocurrency by market cap.

Nevertheless, some important metrics in the chain show a possible change in the supremacy of Etheruem, which raises the age-old question of whether an “Ethereum killer” can dethrone the top network.

Smart Contracts Total Value Locked (TVL) ranking. Source: defillama.com

As shown above, the Ethereum network dominates decentralized applications (dApps) significantly. Due to its high gas fees for transactions, Ethereum’s Ethereum seems to be at a disadvantage compared to its competitors when analyzing the number of active addresses.

In the past week, NBA Top Shot from FLOW Blockchain had nearly 80,000 active addresses, which is five times larger than Ethereum’s Rarible NFT marketplace or even SushiSwap. Therefore, the first data to analyze is the number of daily active addresses in each blockchain.

Daily active addresses. Source: coinmetrics.io

The graph above shows that Tron (TRX) recently outperformed Ethereum in daily active addresses, although this metric can be easily inflated. The Tron network has virtually no fees for simple transactions, resulting in an unfair comparison.

By measuring effective transactions and transfers, it is easier to exclude the addresses that do not contribute to the network.

Transactions and transfers, customized, USD. Source: coinmetrics.io

This way we can see that Tron doesn’t even match Ethereum’s numbers, even though Cardano’s (ADA) recent price growth has resulted in a virtual connection between the two.

Oddly enough, the Tron network has over 14.5 billion tethers (USDT) in circulation, which alone should improve network usage metrics. Cardano now has 90% fewer active addresses per day than Ethereum. However, both networks process the same number of transfers and transactions.

This is especially problematic as Ethereum manages 20 billion Tether tokens and also manages all transactions from Chainlink (LINK), USD Coin (USDC), Wrapped ETH (WETH) and many others.

Market capitalization of ETH, ADA, NEM, NEO, TRX, million USD. Source: cointrader.pro

This data should at least theoretically be reflected in the market capitalization. Therefore, it makes sense for Ethereum to dominate the ranking as no other network is close to its decentralized applications.

Additionally, Ethereum leads by 50x in analyzing transfer and transaction value if we exclude Cardano’s questionable numbers discussed earlier.

Currently, the data suggests that the four “Ethereum killers” analyzed above are unlikely to “flip” the Ethereum network anytime soon.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.

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Melinda Martin