Ethereum is no longer a niche platform for crypto fans, but a mainstream solution for tech companies across various industries. Major developers are using the platform to build user-friendly, highly functional, and decentralized apps.
The performance of ETH (digital currency) compared to other currencies may influence developer and investor confidence. While developers primarily focus on Ethereum’s technical capabilities rather than daily price movements, market stability can impact investor confidence and project funding.
Sites like Yahoo Finance and Binance show that BTC is down 11.64% over the last month (as of late April), while ETH is only down 6.22%. This suggests that while both currencies respond to market forces, the price of Ethereum, as can be seen on sites like Binance, Forbes and Bloomberg for example, may reflect its utility beyond simple value transfer.
Decentralization
Ethereum was the blockchain that popularized smart contracts, which are self-executing agreements with terms written into code. Ethereum’s decentralization means that once a dApp (decentralized app) is deployed, it can’t be changed or taken down.
Once it’s on Ethereum, it stays there. Ethereum.org likens smart contracts to a set of rules that everyone can see, or a vending machine: “if you supply it with enough funds and the right selection, you’ll get the item you want.” The idea being that users can see exactly what they’re agreeing to, and what they’ll receive.
Here are some notable apps using the power of Ethereum.
Brave Browser
Brave is a well-reviewed, privacy-centred web browser. Brave Rewards 3.0, an in-browser rewards program, uses Ethereum to distribute its token. Users can earn Basic Attention Tokens (BAT) by watching ads “that respect your privacy” (per Agicent).
The browser, founded by JavaScript creator and Mozilla co-founder Brendan Eich, is popular in the Web3 community.
The BAT token is designed to eliminate intermediaries and reduce fraud. Users can tip content creators or convert their tokens into other currencies. Brave exemplifies how Ethereum applications can disrupt traditional advertising models while prioritizing user privacy.
Uniswap
Uniswap is a decentralized trading platform based on Ethereum. Users can trade tokens from their wallets without a middleman. The platform includes tokens not available on other popular exchanges. Uniswap was launched by former Siemens analyst Hayden Adams.
Forbes has called Uniswap “one of the most popular crypto applications”; it has gained millions of users since 2018. Over $1 trillion has been traded on the platform. Adams was included on Forbes’ list of ‘30 Under 30: Finance’. He had no prior experience in blockchains or software development before teaching himself with online resources.
Aave
Aave is a DeFi (decentralized finance) protocol on which users give and receive loans of digital assets. Users can lend, borrow, and earn interest on Ethereum assets.
Agicent notes that the platform enables “flash loans, where users get to borrow assets without putting up collateral, provided that the loan is paid back within the same transaction. This feature creates new avenues for making profits through arbitrage, refinancing and other similar activities.”
Ethereum in more depth
Privacy
Ethereum helps users to maintain their privacy. The blockchain is fundamentally transparent, recording all transactions on a public ledger, but it’s evolved to offer privacy options for users concerned about confidentiality.
Zero-knowledge proofs (ZK proofs) allow users to prove they have certain information without revealing it. Projects such as Aztec use these proofs to enable private transactions, letting users shield transaction amounts and recipient addresses.
Gas
Operations in Ethereum (deploying smart contracts, interacting with a dApp, sending ETH) require gas – a fee. Gas may be thought of as the fuel that powers transactions on the blockchain.
An ETH transfer might cost 21,000 gas, or a smart contract interaction (minting an NFT or using a DeFi platform) might cost hundreds of thousands of gas units. Gas fees fluctuate based on network demand – when many people are using Ethereum, fees increase.
Proxy contracts
As mentioned, smart contracts are immutable: once deployed, their code can’t be changed. However, developers sometimes need to update or fix smart contracts later (to patch a bug or add a new feature, for example).
To allow for this, they often use a pattern known as a proxy contract. This separates the contract users interact with (the proxy) from the logic contract, which contains the actual code that governs how the app behaves.
Layer-2 scaling
Layer-2 solutions further Ethereum’s capabilities by managing transactions off the main Ethereum chain, then posting the result back to it, allowing for faster and cheaper dApp interactions. This has been important in gaming, finance, and social media.
ERC-20 and ERC-721 standards
Ethereum standards are templates or guidelines that developers use when building smart contracts for things like tokens and NFTs.
These standards allow different platforms, apps, and wallets to interact with each other reliably. ERC-20 is the standard for fungible tokens (stablecoins, utility tokens). ERC-721 is the standard for non-fungible tokens, or NFTs (artworks, collectibles, in-game items).
Takeaway
Ethereum’s fundamental capability—enabling smart contracts—has spawned a wide range of applications. The DeFi sector uses Ethereum to recreate traditional financial services without intermediaries, offering lending protocols, decentralized exchanges, and applications that allow users to earn returns on their cryptocurrency holdings.
Ethereum’s relative stability, compared to Bitcoin’s surges and falls, may be partially explained by its wide capabilities.
