Ethereum tokens are now more valuable than ETH itself

DeFi is having itself a moment. And while that may not be doing wonders for the price of EthereumEthereum (ETH) itself, the tokenstokens built atop the network are having a very big year.

Total market cap for all ERC20 tokens running on Ethereum has topped $33 billion, according to a data compiled and shared by The Defiant’s own Camila Russo. The source for the figures comes from EtherScan, Ethereum’s most popular block explorer.

And at $33 billion, the estimate exceeds the total market capitalization of ETH, the native token of the Ethereum blockchainblockchain, which today is worth roughly $27 billion.

ETH

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What it all boils down to is that the total value of the economy built around Ethereum now exceeds that of ETH, the token that sustains the blockchain. And this doesn’t even consider the value of the unique tokens based on the ERC721 standard (like those issued by CryptoKitties or Gods Unchained), which move several million dollars on their own. So the gap is likely even wider.

Of all the applications that are running on Ethereum, the most valuable ones are currently related to decentralized finance. As Decrypt previously reported, DeFi tokens are currently growing much faster than Bitcoin, or any other cryptocurrency in the market. At the moment, it appears that it’s DeFi, exchange tokens, and high-risk dapps that are attracting the most attention from investors.

Blockchain > crypto?

Depending on how you look at it, this could be a sign of market maturity. Ethereum could be proving its value as a decentralized, global supercomputer upon which various applications are built. 

In other words, the value of Ethereum as a technology likely cannot be simply measured in terms of ETH’s market cap. ETH, after all, is but one part of a complex ecosystem that continues to evolve. (It may even be a sign that Ethereum cofounder Joe Lubin may yet win his bet against Bitcoin maximalist Jimmy Song, if the mass adoption of dapps actually becomes a thing.)

Ethereum's DeFi tokens are rapidly outpacing Bitcoin

Tokens associated with decentralized finance (DeFi) protocols exploded in value in the past three months, outperforming the wider cryptocurrency market by a wide margin. Over $2 billion worth of Ethereum and Bitcoin has found its way into DeFi protocols already. The second billion of that sum flooded in during just three weeks in June. What’s more, DeFi platforms are now collectively handing out $25 million per month to their users. As a result, the tokens used by these DeFi protocols have grow...

And with Ethereum 2.0 just around the corner (according to some ETH developers, at least), the great DeFi boom of 2020 may be a sign of things to come.

Then again, DeFi hype could also just as well fizzle out like the ICO craze of 2017. Market participants, in the end, will decide.