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Why is DeFi important for Bitcoin Cash (BCH) demand?

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Written by   53
10 months ago

Current situation:

The amount of BCH currently demanded, to pay the transaction costs of the SLP tokens, is approximately 17.5 USD per day, and 122.5 USD per week. This means that at today's price (BCH = 550 USD), an average of 0.2 BCH is demanded weekly, for the community to use SLP tokens.

  • 3,500 average transactions per day, multiplied by a fee of 0.005 USD = 17.5 USD per day.

  • $ 17.5 per day, multiplied by 7 days = $ 122.5 per week.

Potential:

To contrast, on the Ethereum network ERC20 tokens carry out 860,000 daily transactions. Most are for DeFi. It is very important to highlight that the fees of the Ethereum network put a ceiling on its DeFi ecosystem.

If DeFi in Bitcoin Cash manages to grow, becoming half the transactions that Ethereum currently has. We would have 430,000 daily SLP token transactions. Therefore, the demand to pay fees would be 2,150 USD per day, and 15,050 USD per week. Translated in BCH, it is about 3.9 BCH per day and 27.36 BCH per week.

  • 430,000 average daily transactions, multiplied by a fee of 0.005 USD = 2,150 USD.

  • $ 2,150 per day, multiplied by 7 days = $ 15,050 per week.

This new demand is in addition to that of Bitcoin Cash itself. In annual terms it would be 1,313 BCH demanded, taking current data and only the use of SLP tokens.

Conclution:

Projects like AnyHedge and Detoken, increase the demand for additional money that Bitcoin Cash has. This raises the floor of money demand. Therefore, its purchasing power as money, and its price against the dollar. The greater the monetary demand for Bitcoin Cash, the more stable its value becomes over time.

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Avatar for IanBlas
Written by   53
10 months ago
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