Ethereum (ETH), launched in 2015, is currently the second-largest cryptocurrency by market capitalization. Like cryptocurrencies such as Cardano (ADA) and Kusamo (KSM), it has very high developer activity.
Recently, some crypto analysts believe that Ethereum seems to be outdated, but the fact that the Ethereum network has very high developer activity means that the network will still maintain its rapid development trend. In addition, it is currently preparing for a series of major changes. These changes will make it easier for people to conduct transactions using Ethereum. If successful, it may give Ethereum (currently trading at $385) a new impetus - in my opinion, success is a foregone conclusion. The increased usage of DeFi (decentralized finance) is pushing Ethereum towards the next stage, which is known as Ethereum2.0 or ETH 2.0 stage. This will usher in a new era for Ethereum, and therefore, the fundamentals for Ethereum prices are further bullish. Ethereum has been bullish since April, in part due to these developments, but long-term technical analysis of ETH also points to a future upward trend for Ethereum. Next, we will take a closer look at what ETH 2.0 means.
DeFi trading surges
Fundamentally speaking, decentralized finance DeFi is the opposite of centralized finance. Centralized finance is subject to central banks and intermediaries, while DeFi refers to automatically executed contracts or agreements, which are executed through smart contracts without the need for intermediaries such as banks or lawyers. It conducts transactions through online blockchain technology. As mentioned above, since transactions are conducted peer-to-peer, there is no need to resort to any platform from other companies or institutions. DeFi transfers are also known as “Lego Money” because they can be separated and then the parts can be put back together to create something different, such as a different batch of orders. Another unique aspect of decentralized finance is that smart contracts are publicly available and highly interoperable. These financial smart contracts, decentralized applications (DApps), and protocols are all built on top of Ethereum in the form of decentralized networks, or primarily run on Ethereum. Lending, as an important function of DeFi, can be achieved by locking Ether Dai. Since its price against the US dollar is fixed, Ether Dai is a very stable currency. The most popular platform currently is MakerDAO. Holders can lend or borrow liquid funds and pay or receive annual interest. Although providing online loans to another party in a completely anonymous manner may not sound very safe, DeFi is actually very safe because the vast majority of loans made in this way are secured loans, which means that the value of the collateral needs to be higher than the borrowing value. Decentralized finance also provides a 2-Layer payment channel network. Layer 1 payment networks powered by Ethereum and Bitcoin enable instant payment transfers. But the blockchain's ability to process transactions is very limited, so the number of transactions in a specific period of time is also limited. Layer 2 payment channels are built on top of these existing blockchains. Compared with separate Layer 1 payment channels, although their security is reduced, transaction speeds are greatly improved. This is also a trade-off between speed and security. Therefore, the second layer channel is very suitable for daily small retail transactions, which also makes DeFi increasingly popular.
Ethereum 2.0
As DeFi transactions increase, the availability of blockchain networks for such transactions decreases. As of November 2020, its total transaction volume has exceeded US$11 billion. Since most of DeFi is built on the Ethereum blockchain network, the increase in contracts also results in increased processing time and costs. In response to the popularity of DeFi trading, Ethereum brought the Ethereum 2.0 hard fork, which took the crypto market (or at least parts of the market through Ethereum) to another new level. 
Sharding/Scaling
Bitcoin’s high pricing limits its scale. To some extent, Ethereum has a similar problem. But in ETH 2.0, this problem can be solved through sharding. Sharding is a way of processing data that can improve scalability, make it more efficient and applicable to a wider range of applications. In the coming years, Ethereum's price will be favored by traders compared to Bitcoin, as its usability in daily life will greatly increase. In ETH 1.0, data must be verified by all participating nodes, which lengthens the entire processing process - based on the slowest participating node. Sharding can divide data into smaller batches, and each node will be processed independently. 
From Proof-of-Work to Proof-of-Stake
As we all know, if someone wants to obtain cryptocurrency, they must go through the process of mining, and this process is very long and requires a lot of time, energy and effort. This is the so-called Proof-of-Work (PoW), which means that the reward is determined by the amount of mining work. The reason why the mining process is so complicated is to prevent others from attacking the network. After all, the energy required to attack is too high, and the cost of the hardware required to operate is too high. However, this has also greatly reduced the efficiency of the entire system, but ETH 2.0 will solve this problem because Ethereum has realized the transformation from proof-of-work to proof-of-stake (PoS). The PoS process is simpler and requires less energy, so its cost is lower. But the reduced complexity also makes it more vulnerable to attacks. However, this can also be addressed by increasing costs. In short, the mining process of PoW is difficult, but miners who find the correct answer are rewarded ； The mining process of PoS is relatively simple, but miners who find wrong answers will be punished. This means that the attacker will pay for every attempt and failure, so for the hacker, the gain outweighs the loss by launching an attack, thereby improving network security. 
Transactions Per Second (TPS)
Transaction speed is very important when making payments or receiving funds through crypto markets, and although Ethereum 1.0 is one of the most popular blockchain networks, it still cannot compete with its mainstream competitors when it comes to transaction speed. By comparison, the Ethereum network can currently handle 3,000 transactions per second, while Visa can handle 15,000 transactions per second. With the launch of ETH 2.0, its transaction speed will increase exponentially. In his introduction to Eth 2.0, Ethereum’s Vitalik Buterin mentioned that in the first phase of implementation, its transaction speeds will increase to 100,000 TPS. This will cater to the increasing demand for DeFi transactions and increase the usability of Ethereum. All of this—higher transaction speeds, the ability to pay in smaller batches, and easier network access—paint a bright future for Ethereum. Now, the August high of $440 is within reach, and if the crypto market can maintain its upward momentum since April, another breakout is likely. Once this level is broken, the next target will be $500. Although we need to continue to pay attention to the dynamics of the entire crypto market to finally determine its upward and downward trends, overall, the price prediction for Ethereum is still very likely to be bullish. Article recommendation:
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