Ethereum, NFTs and blockchain gaming will be the focus this August.
Let’s take a look at which industries cryptocurrency will dominate this month, as well as some tokens that could benefit from current trends continuing.
Ethereum’s London Hard Fork (EIP-1559)
August will likely be the biggest month for Ethereum this year as a major upgrade known as the London Hard Fork goes live. It consists of 5 Ethereum Improvement Proposals (EIP), which are a mixture of technical and economic changes to the network. Together they should lower transaction fees, reduce network congestion and make ETH coins more valuable.
The most anticipated is called EIP-1559 which makes Ethereum cheaper to use and over time reduces the supply of ETH coins by doing the following:
- Abolition of the existing auction market for fees in favor of a uniform basic fee and an optional tip.
- The network automatically adjusts the basic fee to prevent the fees from exploding at peak times.
- The basic fee is paid in the ETH and burned instead of sent to the miners. Incineration is the process of destroying coins by sending them to an address that no one can access.
- By burning ETH Coins with every transaction, the supply of new ETH Coins is expected to decrease by 1-2% or around 2 million coins per year – although this is not guaranteed.
- The simple supply and demand economy suggests that in the long term this should lead to an appreciation of the ETH price due to the higher utility in combination with a reduced supply.
Why EIP-1559 could make ETH more valuable than ever.
NFT market sets new records
In addition to the London upgrade, the NFT market on Ethereum has also warmed up again.
After a bearish phase since the end of May, NFTs recovered with a record week in the last days of July. Here is a recap of what happened.
- Trading volume for NFTs on Ethereum rose 338% to $ 171 million (compared to the same week a month ago).
- The NFT marketplace OpenSea had its two largest trading days of all time with $ 35 million on July 31st and $ 49 million on August 1st.
- CryptoPunks – one of the first sets of NFT collectibles to hit the market in 2017 – recorded a trading volume of $ 78 million, setting a new average price of ($ 175,520) on OpenSea.
- The price floor (lowest price for a single NFT) for several large collector sets has more than doubled.
Start trading NFTs on OpenSea
The analysis suggests that several whales and mutual funds are behind the recent surge, buying “blue-chip” NFTs like CryptoPunks.
The founder of Consensys (an Ethereum technology and start-up incubator) has also highlighted NFTs as the next frontier for Ethereum. He believes the technology will surpass art and collectibles to enable entirely new enterprise applications such as intellectual property, software ownership, and expand existing media empires.
The renewed focus on NFTs from the Big End of Town shows continued confidence in the sector, which could see retail speculators re-entering the market in the coming weeks.
Other blockchains and tokens that could benefit from a resurgence of NFTs include:
- Flow. Developed by Dapper Labs, the team behind NFT pioneer CryptoKitties. Flow is a blockchain and token that host official NBA (Top Shots) and UFC collectibles.
- Rarely. Rarible is one of the largest Ethereum NFT marketplaces and is controlled through the use of the RARI token.
- Immutable X. An Ethereum Layer-2 solution specifically designed for NFTs and the ERC-721 standard used for most modern NFTs.
- Binance Smart Chain (BSC). The world’s largest cryptocurrency exchange recently launched a new NFT platform that hosts assets on both BSC and Ethereum.
Axie Infinity and Blockchain Games
Another growing sector, both on Ethereum and elsewhere, is blockchain gaming.
Axie Infinity (AXS) recently introduced the world to the concept of “Play-to-Earn”, which rewards players with cryptocurrency for playing. The AXS token has grown 400% in the last month as the game made headlines around the world for allowing people in countries like the Philippines to earn a living wage just by gambling.
While most blockchain-based games are currently low-fi or primitive compared to modern AAA titles, the play-to-earn model is so compelling that it’s likely to be adopted on a large scale by the $ 150 billion industry will. Blockchains like Enjin already work hand in hand with game developers like Ubisoft as part of the Blockchain Game Alliance.
Gaming tokens have been dominating the trending coins from CoinGecko and CoinMarketCap lately, which shows that this could be a popular sector for speculators in the coming weeks.
While it is difficult to predict the next Axie Infinity, Illuvium (ILV) is a notable project. It was developed by Kieran and Aaron Warwick, siblings of Kain Warwick, creators of the hugely successful derivatives trading platform Synthetix. It uses the Immutable X Layer-2 chain, which makes it more scalable than previous generations of Ethereum-based games. This will allow Illuvium to come much closer to the quality of AAA titles as there are fewer restrictions for developers.
Similar to Axie Infinity, it’s about teams of monsters battling each other. However, the team plans to take it even further by introducing an open 3D world and sophisticated graphics to bring blockchain games to the AAA market.
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Disclosure: The author owns a number of cryptocurrencies at the time of writing
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