- The number of smart contracts deployed on Ethereum is falling.
- Ethereum's price is also on the verge of marking a new year high of $3000.
Although the concept of a smart contract has existed since the 1990s, Ethereum was the first platform to recognize its potential and remove the necessity for a third party through its implementation. This has contributed to the advancement of the smart contract market.
However, according to a Banklesstimes.com analysis, the number of new smart contracts deployed over the past six months has fallen by over 90%. The number of new smart contracts deployed on June 1, 2023, stood at 1.4m. However, 60.4k smart contracts were deployed on Ethereum on December 1.
BanklessTimes crypto expert Alice Leetham commented:
BanklessTimes crypto expert Alice LeethamTypically, the number of contracts executed on a contract network indicates the level of on-chain engagement. There is a greater chance that this engagement could impact price movements when there are more dApps in various sectors, like DeFi, NFTs, gaming, and others. This is because ETH, the token of Ethereum, is utilized for settling network fees.
She added that whenever there is a spike in on-chain activity, the demand for block space is higher, requiring developers to use more ETH for a slot in a block.
$3000 in the First Few Days of 2024?
Falling contract deployment coincides with the exemplary performance of ETH prices. ETH prices have rallied from $1873.91 on June 1st to $2352.50 on December 11th. Even though bulls are yet to push the coin above $2400, an immediate resistance level that, if broken, could see ETH prices float to new 2024 highs.
Throughout history, there has been a link between the quantity of contracts utilized and the corresponding price movements. It is common for developers to intensify their efforts when prices are on a trend, resulting in contracts being deployed. However, it is worth noting that this pattern was not evident in the performance observed earlier in June. During that time, there was a disparity between spot prices and the number of contracts launched.
Despite experiencing a fivefold increase between January 14 and January 23, there is potential for a much higher number of contracts if this action were synchronized with the fluctuations in ETH prices.
However, it’s worth mentioning that smart contracts on the Ethereum network have shown growth in 2022. According to a report from Alchemy, a software company, over 100,000 dApps were introduced during the course of the year.
