Decentralized finance (DeFi) economist at blockchain firm Consensys David Shuttleworth has suggested that Ethereum (ETH) is now “the bedrock of the internet,” a factor validated by the recent Merge upgrade that made switch the network to a proof-of-stake (PoS) protocol.
According to Shuttleworth, Ethereum can power more businesses while referring to the network’s ability to process more transactions than established platforms like Visa (NYSE:V), it said during an interview with Kitco News October 6.
He pointed out that Ethereum is capable of mass adoption, citing qualities such as guaranteed security for users.
“I am by no means an Ethereum maximalist. I’m a big fan of the multi-chain world, but I think Ethereum serves as a layer of settlement. You know Ethereum has settled more transactions than Visa year over year in the last year. I think one of those things where the mass adoption of Ethereum just because of the security and the value in it is going to make people use it to do business,” Shuttleworth said.
Ethereum still faces competition
However, Shuttleworth acknowledged that Ethereum still faces competition from other projects that also have strong use cases in industries like DeFi.
At the same time, Shuttleworth noted that ongoing macroeconomic factors are hampering Ethereum’s ability to attract and adopt massive capital inflows.
“Macro conditions need to calm down before we see near-mass adoption and a massive influx into the ecosystem. Rising interest rates may have a silver lining for DeFi and that, especially with Ethereum, assuming the pace of network transactions heats up a bit I think you’ll see it start to turn deflationary. When it gets deflationary, that’s when it gets super attractive to institutions,” he added.
Ethereum remains fragile after the merger
Notably, following the Merge upgrade, it was predicted that Ethereum would likely see an increase in institutions as the asset turned deflationary.
However, the value of Ethereum and the general crypto market have been offset by prevailing elements such as high inflation and the threat of continued rising interest rates.
For example, on October 3, Finbold announced that Ethereum’s market capitalization had fallen nearly 20% since the September 15 Merge upgrade.
Watch the full interview below:
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