Thread by @BMBernstein

ETH gas % used is on the rise again to 90%, approaching the December highs of 94%. And this is without any application with material usage...

What's going on and what does the future look like for ETH?

Only 4 applications have more than 500 daily active users. ETH's supposed use case of "decentralized applications" is clearly not where the usage is coming from -- and yet blocks are still nearly full.

Over the past 24 hours ETH has had 812k transactions yet only 67k came from the top 100 apps.

So only 8% of ETH's transactions are from what's supposed to be the purpose of the network. What are the rest? Like ICOs and payments.

Data from @nic__carter and bloxy show that in December 90% of volume was actually from a mixer. According to bloxy that has fallen precipitously, but theres a chance it's been on the rise again more under the radar (??).

Txn fees are also increasing, albeit they are not nearly as high as they were back in December / January.

This is because USD txn volume on chain has absolutely cratered since Jan. from $10bn to under $2bn

Blocks are full. And they are full with much lower volume transactions. The ETH public good--the blockspace--is being exploited by low value transactions

chart from @coinmetrics

We're on the precipice of some major applications launching: Augur, Golem, Mana, Cryptokitties w. $12m of funding, etc.

Without Plasma and Sharding, I expect fees to go through the roof on ETH. And if fees are too high from low value "spam", real usage will be crowded out

Simultaneously, dapp platform competition is heating up. EOS has a $4bn war-chest, DFINITY is coming off of a massive raise and Stellar is pushing more ICOs, for example

These platforms *embrace* the centralization that's inherent to their model and thus all will have lower fees

Based on the data above, it looks like ETH hasn't actually built a first mover advantage / moat in smart contracting. Most of the txn's arent from dApps.

Yet, that may be the only potential smart contract use case with any network effects

Capital raising and MoE functionality will be commoditized. For capital raising, all that's necessary is a multisig and a standard token that exchanges can list

There won't be strong enough network effects to outweigh the high fees and bribes from platforms to ICOs

The next few months are going to be pivotal for smart contract platforms.

Gas h/t @KyleSamani
Data from @etherscan