What is Ethereum like in the eyes of newcomers?

Author: Fairy, ChainCatcher

Every round of bull and bear alternation will always bring a group of new faces full of curiosity. In their eyes, Ethereum is often an important threshold for entering the crypto world - advanced technology, mature ecosystem, and stable industry status.

But is reality really so beautiful?

On one hand, there is the trust of new people in Ethereum, and on the other hand, there is the ruthlessness of the market. When we communicated with several college students majoring in blockchain, we found that there might be some kind of separation between their expectations and the current ETH situation.

Are these hopeful newcomers the future builders or passers-by who are eventually ruthlessly eliminated by the market?

Ethereum from the perspective of a newbie: trust, technology and

understanding

Rabbit

A freshman majoring in blockchain, a pure novices, has not yet conducted cryptocurrency or contract transactions.

Tusi has not entered the market yet because he thinks he lacks knowledge reserves and dares not invest rashly. However, when talking about Ethereum, he said that he had a natural sense of trust in Ethereum and believed that it belongs to the top project and is more authoritative.

Asked whether he would buy ETH in the future, he said he would consider it because he thinks the risk of ETH seems to be smaller than other currencies.

Lucien

A senior student in blockchain engineering majoring in blockchain engineering mainly focuses on smart contract development and technical aspects, and has little understanding of the market. ETH accounts for 20% of his cryptocurrency spot investments. After overall communication, he is optimistic about Ethereum.

Lucien said that from the perspective of his understanding, Ethereum technology is developing, and the development of Ethereum is driving the development of the industry. For example, the upgrade of Ethereum some time ago reduced the gas fees on the chain, reducing the interaction costs of users. Moreover, the improvements of Cancun upgraded solutions are also more friendly to developers. For example, the new opcode in EIP1153 has become an important part of Uniswap V4.

However, he also pointed out that the framework of Ethereum is relatively mature, and the current improvement is mainly optimization, so the growth rate is relatively limited.

Vernon

I graduated from blockchain engineering for nearly a year and focused on meme currency and contract trading, preferring short-term operations.

Among all crypto assets, ETH is the only large-cap currency invested by Vernon, mainly used for financial management and risk diversification. When talking about the reasons for choosing ETH, he said that the price of ETH fell significantly when buying, and this cycle did not break through the historical high. At that time, he believed that there was still room for growth.

He understood ETH's sluggish performance in this cycle and held a similar view to Lucien - the challenge of Ethereum is that innovation is limited. Today, Ethereum has difficulty in carrying out large-scale reforms, and the pace of innovation has become cautious and fragmented.

Although the three newcomers in this exchange have different perspectives, they all have a good impression of Ethereum and recognize the value of Ethereum. In other words, Ethereum's "popularity" in the newbies circle is still strong, like the "people-friendly big brother" in the crypto world. However, ideals are full, but reality may not be as they wish. The current situation of Ethereum may not be as optimistic as new people.

Ethereum in reality: How long can faith last?

New demand for ETH gradually weakens

Encryption KOL Murphy published an article to reveal the current status of investors from the current status of ETH data: high-level investors are increasing their positions, but new demand for ETH is weakening. After ETH fell below $2,000, there was little new purchasing power.

ETH's recent cost basic distribution (CBD) shows two major holding groups:

1. High-level increase group ($3,200-$3,500): These investors did not sell out during the period when ETH fell to $1,900, and continued to increase their positions, and had strong beliefs and willingness to hold them.
2. Median position reduction group ($2,600-$2,800): These holders cut their losses and reduced their positions after ETH fell below $2,300, and only some of the chips remained.

 CBD data for ETH in the past 3 months

ETH "deflation failed" controversy

Peking University PhD Hu Yilin posted a statement saying that ETH's so-called "deflation" is essentially a failed design. Under the PoS mechanism, even if the total amount of ETH is decreasing, it does not mean fair or healthy development.

He pointed out that there is structural inequality in the Ethereum economic model - the stakers are always the "expansion" party, while frequent traders bear the cost of "contraction". The rich, vested interests, and old money always sit firmly in the earnings zone. The more active online transactions are, the more Gas fees are burning, and the more ETH is deflated, they are still the ones who benefit. For newcomers, retail investors, and underlying traders, the more frequent the transactions, the heavier the burden of Gas fees, and it is further squeezed by the deflation mechanism.

Hu Yilin sharply concluded: Under the ETH system, old money can not only outperform inflation with zero risk, but also enjoy interest; even under the deflation mechanism, the "faucet" on the old money not only does not close, but instead opens even harder.

Whales leave frequently

According to data shared by Ali, an analyst on-link, whale addresses sold nearly 130,000 ETH in the past week.

• On March 13, Giant Whale...eCa41 cleared its position and cut its losses in December 2023, with a loss of US$1.974 million.
• On March 14, ETH giant whale recharged 16,467 ETH to HTX after 25 years of holding a position, or made a profit of US$13.1 million.
• On March 17, the 3-year-old wallet sold all 67 ETH (worth $1.92 million) and earned only $126,000.
• ......

Don't let faith turn into a runaway

The world is bustling, and it is all for profit.

The brand, technology and ecosystem accumulated by Ethereum over the years have shaped its sense of trust in the eyes of newcomers, making them willing to take root, learn, try and explore here.

But the market is ruthless...

Ethereum, don’t let them learn only one thing in the end - “Run fast.”