- ETH Q1 result for 2021.
- Reactions to ETH 2021 Q1 result.
The number one leading decentralized, open-source blockchain (Ethereum) recently released its first-quarter performance for the year 2021. Undoubtedly, the network had a lot to write home about during the period.
The release describes the year 2021 as the most important year in Ethereum’s history noting economic security and scalability as two key themes for 2021.
In April the Ethereum core dev team approved EIP1559—a software update that improves the bid process for block space and introduces a burn mechanism for the base portion of the transaction fee. Fee burn offsets a substantial portion of ETH issuance, and in turn, paves way for long-term network security with minimum dilution. EIP1559 is to be deployed on test nets on the 9th of June followed by an official rollout via the London hard fork on the 14th of July.
The release also reveals that Ethereum aims to switch from its current proof of work algorithm to proof of stake. The initial version of the proof of stake chain (“beacon chain”) was released in December 2020. On the 12th of May developers conducted a successful merge of the two chains in a test environment. Proof of stake will reduce ETH’s energy consumption by 99 percent while providing democratic access to staking rewards for all ETH holders.
Ethereum Q1 ecosystem key results
Firstly, the transaction fee for the network increased 200x to $1.7 billion in Q1 2021, compared with $8 million in Q1 2020. For the month of April, ETH generated annualized revenue run rate of $8.6 billion—comparable to AWS in 2015.
Also, transaction volume on Ethereum increased 20x to $713 billion in Q1 2021, compared with $33 billion in Q1 2020 likewise its median transaction fee increased 126x to $7.63 in Q1 2021, compared with $0.06 in Q1 2020.
The daily active addresses increased 71 percent to 607k in Q1 2021, compared with 364k in Q1 2020 as staked ETH which launched in December 2020 reached 3.6 million ETH in Q1 2021.
For the ecosystem, the Decentralized exchange (DEX) volume increased 76x to $177 billion in Q1 2021, compared with $2.3 billion in Q1 2020. Total value locked in its Decentralized finance (DeFi) also increased 64x to 52 billion in Q1 2021, compared with $0.8 billion in Q1 2020.
Stablecoin value on ETH also increased 5x to $41.9 billion at quarter-end Q1 2021, compared with $7.1 billion at quarter-end Q1 2020.
NFT art sales also increased 560x to $396 million in Q1 2021, compared with $0.7 million in Q1 2020.
Reactions to ETH Q1 report
Anthony Sassano, founder of The Daily Gwei described Q1 as a phenomenal quarter for Ethereum. He alluded this to the on-chain metrics from active addresses to transaction volume which all reached all-time highs.
“The popularity of DeFi shows that ETH is more than just a cryptocurrency, it is the world’s best programmable money,” said David Hoffman, founding father of Bankless.
“People are realizing that Ethereum isn’t just money, it’s ultra-sound money,” said Justin Drake, a researcher at the Ethereum Foundation. “While other cryptocurrencies may boast of having a supply ceiling, Ethereum will soon have no supply floor.”
ETH’s strong Q1 growth was not without pains. Gas prices spiked in Q1 due to the incredible popularity of DeFi and NFT applications.