Unlike Bitcoin or Polygon, Ethereum has many use cases, like DeFi, running applications, and buying and selling NFTs. This is why the movements of prominent cohorts of holders such as ‘Sharks’ and ‘Whales’ aren’t always reliable for determining the market trajectory for ETH. Because the motive behind their transactions might go beyond just market speculation. For instance, these transactions could be for interacting with smart contracts or paying transaction fees, making it challenging to predict Ethereum’s price based solely on these transactions.
One of the key advantages of analyzing wstETH and rETH holders is that it helps filter out the noise. By focusing on these wrapped and staked tokens, we can more accurately identify committed and strategic investments that are related to price expectations from holders that carry the power to move them. By understanding the behavior of these key stakeholders, all of us can gain better insights into market dynamics and make more informed decisions related to Ethereum, and ERC-20 projects.
Santiment, in its latest report, has identified key lesser-known indicators that might come in handy to predict ETH’s next big pumps. The first is stakeholder accumulation for Wrapped Staked Ethereum [wstETH] and RocketPool Ethereum [rETH]. For the uninitiated, wrapped tokens represent ETH which is being staked [locked up] in specific protocols like DeFi.
By allowing users to earn rewards, while still participating in the DeFi ecosystem, the token’s dual functionality reflects a clear picture of trading and investment behaviors. This, in turn, offers crucial insights into market trends and sentiment related to Ethereum and its ecosystem rather than mere accumulation and dumps from millionaires and billionaires.
Besides understanding Ethereum’s market behavior through tokens like Wrapped Staked Ethereum and RocketPool ETH, another valuable tool is Eigen Layer.
Scaling Ethereum’s Network
Eigen Layer is a blockchain scaling solution that aims to improve the performance and scalability of the ETH network. It uses a unique ” eigentrust ” approach to validate transactions, making the network more efficient and cost-effective.
As reported by TronWeekly, this protocol aims to enhance security and functionality for the network empowering ETH stakers to validate any software modules referred to as Actively Validated Services [AVS]. Hence, EigenLayer strengthens the network’s resilience through centralizing security aspects.