Ethereum Fees Dropping Will Power The Next Wave In Crypto Innovation

Ethereum Fees Dropping Will Power The Next Wave In Crypto Innovation

Spread the love

Ethereum is set for another bull run

Getty Images

Fees and expenses are part of every business ecosystem, and the crypto world is no different; with fees set to drop even further on the Etherum blockchain thanks to the Dencun upgrade there are several key implications that crypto investors and advocates should be aware of moving forward.

While bitcoin continues to receive the bulk of attention and investor focus thanks to a very strong beginning of 2024, the approval of spot ETFs, and firms like Microstrategy issuing bonds with the express purpose of using those proceeds to purchase more bitcoin, the reality of the crypto landscape is more nuanced. Specifically, at the same time of increased coverage and investment dollars flowing into bitcoin the rest of the cryptoasset sector has also had a strong start to the year. Ethereum ETH has experienced an increase of over 100% so far this year, the NFT sector is showing signs of revitalization, stablecoin market capitalization has hit multi-year highs, and institutions are speculation on the possibility of an ether ETF.

Certainly all of those headlines are worthy of excitement and celebration, but there are other significant changes occurring, with one notable one being yet another upgrade to the Ethereum network. The second largest cryptocurrency in the world, and the blockchain that supports the vast majority of Layer 2 applications, any changes to the functionality and cost structure of this blockchain are worth looking into.

Let’s take a look at two of the ways that lower costs, yet again, for Ethereum, will drive innovation and application growth for crypto investors and entrepreneurs.

Smart Contract Proliferation

Not as scintillating or headline generating as bitcoin prices or the possibility of new crypto trading products, the growth of smart contracts is set to a boon for greater blockchain and tokenization asset adoption. Serving as an integral connectivity bridge for both blockchain-to-blockchain communication as a well as blockchain-to-other technology communication, smart contracts have an almost innumerable number of use cases. In addition, smart contracts play a key role in making blockchain-based solutions more investable for enterprise users since these tools help enable scalable transactions appropriate for business use.

Ethereum, it is important to remember, serves as the bedrock for the vast majority of smart contracts even as bitcoin-based smart contacts have emerged. With fees dropping yet again, institutions investing heavily into blockchain and tokenized data options, smart contracts are almost assured to experience another leg up in growth. Ethereum developers and investors are set to benefit from this, even if the price per token remains far below bitcoin. One example of this growth already existing in the marketplace is the 67% growth in Cardano ADA smart contracts in 2024 alone.

Increased NFT Functionality

NFTs are a subset of the cryptoasset sector that is still struggling to rediscover a viable niche and role in the marketplace. After bursting into the mainstream with the Beeple auction in 2021 and experiencing a torrid bull market in the aftermath of that, the NFT space crashed virtually to zero. Research in 2023 indicated that approximately 95% of NFTs were worth zero, but that is only part of the story. At the core of the application, NFTs represent a type of control and ownership between the digital and physical realms, will play a key role in portable data for individuals of across the board, and have an integral role to play in the development of self-sovereign identity. In short, NFTs are much more than digital artwork, and the gross mischaracterization of these assets in the form of applications such as Bored Apes will continue to be an obstacle toward great adoption.

These obstacles, however imposing, are not permanent and the market is showing signs of this. In March 2024 Hivemind Capital Partners raised a $50 million fund was raised explicitly to take advantage of the resurgent crypto market to fund and invest in NFTs. Although the future is uncertain, the conversation around NFTs seems to have matured alongside other aspects of the crypto economy.

Even as bitcoin continues to hit all time highs and attract billions in investment dollars, the crypto world continues to innovate and grow in a multitude of ways. The continuous efficiencies and improvements created via the Ethereum blockchain are proof of that.

Crypto has hit mainstream adoption, and now the industry seems poised for another leg up in terms of real world, practical, and enterprise ready use cases. The business and investor community should take note.

Follow me on Twitter or LinkedIn. Check out some of my other work here. 


Related News