Is Ethereum a Dog? Can the Prague Upgrade Save the Market? (Part 1)

Is Ethereum a Dog? Can the Prague Upgrade Save the Market? (Part 1)Unlike the Cancun upgrade in the first half of the year, which was hyped up for six months beforehand with various calls to action, the Prague upgrade has arrived, and many token holders and stakers are unaware of it! The main reason for this is likely the dismal performance of the token price and the disappointing outcome of the Cancun upgrade, which saw prices fall instead of rise, and continued to decline.1

Is Ethereum a Dog? Can the Prague Upgrade Save the Market? (Part 1)

Unlike the Cancun upgrade in the first half of the year, which was hyped up for six months beforehand with various calls to action, the Prague upgrade has arrived, and many token holders and stakers are unaware of it! The main reason for this is likely the dismal performance of the token price and the disappointing outcome of the Cancun upgrade, which saw prices fall instead of rise, and continued to decline.

1. The Cancun Upgrade Ended Investors' Upgrade Fantasies

On March 13, Ethereum completed the Cancun upgrade, but the token price did not rise as the market expected. Instead, it briefly plunged by 3.2%, falling from $4100 to $3,846. Since the March upgrade, the price has fallen to as low as $2100, nearly halving! Why did the price fall after the upgrade was completed? We will delve into the deep-seated reasons later. Lets first review the price changes brought about by several past upgrades.

Scenario 1: Price Falls After Upgrade, But Recovers in the Following Six Months

The Shanghai upgrade, also known as the "Merge upgrade," in 2022 was a major update that transitioned Ethereum from the Proof-of-Work (PoW) algorithm to Proof-of-Stake (PoS). Due to the significant impact of this upgrade on mining and the overall blockchain operation, it attracted significant attention from users. In the week leading up to the Merge upgrade, Ethereums price was higher than $1,700 (peaking at $1,779 on September 11, 2022). However, on September 15, the day of the Merge upgrade, Ethereum plummeted by 11% to $1,472 and continued to decline steadily for the following days. However, after six months, in March 2023, the price reached $2000, a gain of 17%.

Additionally, the GrayGlacier upgrade on June 30, 2022, saw Ethereum drop by a small 3.8% from $1,098 to $1,057. Six months later, it had gained 43%.

Scenario 2: Price Increases After Upgrade, Continues to Rise

Of course, not every upgrade results in a price decline. There have been several upgrades in the past where prices rose. For example, before the London upgrade in August 2021, Ethereum was trading at $2,724 on August 4. On August 5, the day of the upgrade, it rose to $2821, and by August 7, it had increased by another 11.7% to $3,151. After six months, it reached $3019, representing a six-month gain of 11%.

Similarly, the Berlin upgrade in April 2021 saw Ethereum at $2,429 on April 14. On April 15, the day of the upgrade, it rose by 3.5% to $2,514. Six months later, the price reached $4132, a gain of 70%.

Scenario 3: Price Falls After Upgrade, Continues to Fall

The Cancun upgrade stands alone!

This summarizes the price changes observed in the five upgrades mentioned above. Of course, we cannot solely attribute the price fluctuations to fundamental changes brought about by the upgrades themselves. Market cycles are likely a more significant factor. Therefore, let's include Bitcoin as a benchmark to see if Ethereum is stronger or weaker compared to the "blue-chip coin."

Comparing the above table, we can see that Ethereum's performance during asset cycles and after upgrades, the Cancun upgrade is a disgrace to the ancestors.

2. How Did Ethereum Become a "Dog"? Is the Cancun Upgrade to Blame? Yes and No.

The explanation of the upgrade content is abstract. In simple terms, it means a 10x increase in transaction speed, a 100x reduction in transaction costs, and the elimination of the most expensive storage cost. While this seems like good news, one negative consequence is the complete fragmentation of Ethereum, further fragmenting liquidity. It also allows for theft, and the camel, though skinny, is still bigger than a horse.

Next, I will use a simple analogy to explain how the token price has crashed in the last six months.

If we compare Ethereum to the first super-old, established supermarket in town, this old supermarket faces the pain point of having incredibly skilled cashiers who are all manually calculating transactions. This process is slow. Every transaction requires calculation and immediate accounting entries and audits, with extra cashier fees that are expensive. These cashier fees are payable in Ethereum tokens, which are required for settlement, and the mechanism is foolish. One purchase can take 2-30 minutes, creating long queues. During holidays, when there are promotions, the queues are even longer. Theres a method to this madness: whoever pays the highest cashier fee gets served first. Users have consistently complained. The foolish part is that customers need to purchase items one by one, without the convenience of shopping carts or bulk checkout!

Thus, Ethereum came up with a "good solution." They first replaced the manual-calculation cashiers (miners) with an electronic cashier system (PoS mechanism). Then, they divided the supermarket into several zones, such as food, household goods, and liquor. With this zoning, each zone has a sub-cashier system that doesnt require immediate accounting entries like the old cashier method. It simply records transactions, and any errors are corrected later (OP). Of course, theres a time-saving method: zero-knowledge accounting (ZK), where all entries can be submitted in batches to the supermarket headquarters (Ethereum), allowing multiple customers to checkout together.

In theory, this improves speed and reduces costs. With this idea in mind, Ethereum decided to boost these zones further with the Cancun upgrade, further decentralizing authority to each zone and helping them reduce costs and improve efficiency.

However, while costs have decreased and efficiency has improved, the profit-making effect has disappeared, and customers are gradually leaving. An interview with Mr. Liu, an ordinary citizen, revealed the root of the problem.

Firstly, the zoning is faster, but the goods are incomplete. The desired items are no longer available, and there are many counterfeit and substandard products. Secondly, the zoning isnt a vertical division based on categories. Whats the difference between the ZK zone and the OP zone? They sell similar things, but less, and of poor quality. And then theres the bizarre rule: in the ZK zone, I need to transfer ETH to ZK-ETH to use it. When I discover the ZK zone has nothing good, I buy a bottle of Nongfu Spring mineral water. Then, I switch to the OP zone and find the water heater I want, but I have to transfer again. Back and forth, Ive been going around the supermarket for a full day, and it seems like I have leftover change in each zone. I havent been there for a while, and Ive forgotten that I have some leftover money. Sometimes, its simply too much hassle, so I end up returning to the main counter to buy things. During holidays, the queue at the checkout counter is still full. Also, over the past year, all the VC products youve sold have been terrible. Big brands, but poor quality. Theres a new supermarket called SOLONA that just opened next door. They sell all sorts of MEME products, and the price increases dozens of times over when you buy them back home. To be honest, I havent been back to the Ethereum supermarket in a long time.

When the Ethereum supermarket board of directors calculated the numbers, they realized that they had saved customers ten times the cost and increased efficiency tenfold. However, the total customer count has significantly dropped. Theyre still issuing more Ethereum stock, but investors arent buying. So they decided to crash the market while it was still high. Times are tough.

As a result, the Ethereum supermarket has fewer and fewer customers. Ethereums goods are of terrible quality. Theres more newly issued Ethereum stock than whats being bought, and the Ethereum board of directors is secretly crashing their own market. Ethereum stocks are becoming increasingly unattractive. Even in August, when Wall Street showed interest in Ethereum stock and planned to issue an ETF, it was as if nothing had happened.

This is a general overview of how Ethereum has become a dog at this stage. Furthermore, if youre optimistic about SOL, simply buy SOL. If youre optimistic about the Ethereum ecosystem, because its fragmented, some people are selling ETH, others are buying OP, and others are buying UNI. UNI says, "Lets simply apply for a new platform and make our fragmentation even more complete." Consequently, AAVE and others are also waiting in the wings.

Ethereum has taken a giant leap, but it hasnt kept up with attracting investment. Theres little capital circulating within the circle, VC tokens are failing, MEME tokens are stealing the spotlight, and the market share has been divided among several second-tier platforms, resulting in fragmented liquidity and a diversification of investor capital flows. The chairman doesnt attend court, and he enjoys his

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