Tag: Interoperability

The Top Bridges for Interoperability With Ethereum

by Cryptobriefing

Key Takeaways

  • Cross-chain bridges on Ethereum have taken off with the rise of the multi-chain era.

  • There are already multiple bridge services offering a way to migrate tokens between Ethereum and other networks.

  • As bridges develop, cross-chain interoperability is likely to become an important theme in crypto.




Share this article



Bridges offer a way to migrate assets between blockchains. Crypto Briefing unpacks some of the top bridges offering interoperability between Ethereum and other chains.

Ethereum Bridges Usher in Multi-Chain Era

Since crypto’s fabled “DeFi summer” of 2020, cross-chain bridges on Ethereum have exploded in popularity. Fueled by the growing number of DeFi options across various Layer 1 networks and the rising costs of using Ethereum mainnet, the use of bridges to move assets from one network to another has soared.

Today, the leading cross-chain bridges allow Ethereum users to migrate ERC-20 tokens to other networks.

Bridges are permissionless applications that allow users to send tokens and arbitrary data between blockchain networks. By deploying bridge connections, various competing or complementary networks have attempted to capture a portion of the value generated on Ethereum, the most used blockchain for DeFi and NFTs.

Ethereum bridges offer a way to send assets to EVM-compatible networks like Binance Smart Chain, Avalanche, and Fantom, as well as non-EVM-compatible networks like Solana and Terra. Ethereum Layer 2 solutions and sidechains also boast interoperability with Ethereum via several bridges.

To bridge tokens from Ethereum to other networks, users deposit assets into a bridge contract deployed on Ethereum mainnet. The same amount of the asset is then minted on the other network. The tokens get burned when the assets are moved back to mainnet, and are then made available on the network. 

In theory, all Layer 1 and Layer 2 networks could have a mechanism to send and receive assets from Ethereum to other networks. Sending funds to an EVM-compatible network is a simpler process; users can connect through an Ethereum-based wallet like MetaMask. 

When migrating Ethereum-native assets to a non-EVM-compatible chain like Solana, the bridge connecting the two networks uses two different wallet addresses and token standards. This means that users have to connect both an Ethereum and Solana-compatible wallet, such as MetaMask and Phantom. 

As the race to capture DeFi and NFT activity has intensified in recent months, multi-chain bridges have begun to play a crucial role in the crypto ecosystem. Solutions like Hop Protocol and Celer Network have proven popular by deploying Ethereum smart contracts that let users transfer assets from mainnet multiple Layer 1 and 2s. 

Binance Bridge
Binance Bridge is a popular point of entry from Ethereum to Binance Smart Chain, an EVM-compatible blockchain developed by the world’s largest crypto exchange. Through the bridge, ERC-20 tokens are wrapped into BEP-20 assets for use on Binance Smart Chain applications like PancakeSwap, Venus Protocol, MDEX, and Alpaca Finance. Ethereum users can access the bridge by adding Binance Smart Chain to their MetaMask or alternative Web3 wallet. There is currently over $5.78 billion locked in the Binance Bridge. 

Avalanche Bridge 

Avalanche is one of Ethereum’s top challengers. It boasts high throughput and offers EVM compatibility with support for Aave, Curve, and Sushi, along with a host of native dApps.

The best way to transfer ERC-20 tokens from Ethereum Avalanche is through the Avalanche Bridge. Similar to Binance Bridge, the Avalanche Bridge can be accessed through MetaMask. Once the assets are bridged, tokens are appended with the symbol “.e.” For example, the bridged USDC token is called USDC.e.

All transfers across the bridge must be approved by three of four trusted partners of the Avalanche Foundation, also known as wardens. There’s currently around $4.8 billion locked into the bridge contract. The Avalanche bridge does not support ERC-721 tokens, so it’s not possible to move NFTs onto the network. 

Solana Bridges: Wormhole, Sollet and Allbridge


Solana is arguably the strongest competition to Ethereum’s dominance today. Solana is faster and cheaper than Avalanche, with block times of around half a second. Those who want to send ERC-20 tokens to Solana can use two primary bridges: Sollet and Wormhole. 

Tokens sent from Ethereum to Solana are wrapped and minted to the SPL token standard via Wormhole and Sollet, which allows them to be used across Solana dApps. About $265 million is locked in Wormhole, and $217 million in Sollet. 

It’s worth noting that tokens that bridge to Solana using Sollet or Wormhole will not be compatible with each other because Sollet-wrapped tokens are different from Wormhole-wrapped versions of the same ERC-20 tokens. 

Wormhole is the more popular of the two bridges. Unlike Sollet, it also lets users transfer NFT tokens, whether they were minted as an ERC-721 token on Ethereum or an SPL token on Solana. While the two bridges charge less than a cent for a single cross-chain transaction, Ethereum gas fees are significantly higher. 

In addition to Sollet and Wormhole, a multi-chain bridge solution called Allbridge recebtky launched. Using liquidity pools containing more than $1.5 billion in value locked, Allbridge enables token transfers to Solana from Ethereum and other blockchains like Binance Smart Chain, Avalanche, and others. 

Fantom’s AnySwap Bridge

Fantom is another top contender in the Layer 1 race. Like Avalanche, it operates an EVM-compatible network called Opera that is faster and cheaper than Ethereum mainnet. 

Fantom is perhaps the only chain that does not use a 1:1 standalone direct bridge service with Ethereum. Instead, it predominantly uses a multi-chain solution called AnySwap to execute cross-chain transfers across multiple EVM networks. The Fantom AnySwap bridge is currently the go-to solution to send tokens from Ethereum to Fantom and vice versa. 

As a multi-chain liquidity solution, AnySwap uses pools consisting of specific tokens deployed across multiple chains for bridging. This system allows for tokens to be sent to Fantom from Ethereum, Avalanche, Polygon, and Binance Smart Chain. AnySwap’s Ethereum-Fantom bridge currently holds about $2.1 billion in value locked.

There are currently three other platforms for bridging tokens to Fantom from Ethereum and other chains: multichain.xyz, SpiritSwap, and SpookySwap. These solutions use AnySwap as their backend but have gained popularity by offering user-friendly web interfaces. 

Polygon Bridges

Many bridge solutions have also been created to allow for moving ERC-20 tokens to and from Ethereum sidechains like Polygon.

Polygon is the biggest sidechain network that runs parallel to Ethereum. It has experienced parabolic growth over the last year, helped by several Ethereum-native DeFi projects expanding to the network. It currently holds more than $9 billion in total value locked. 

The main entry point from Ethereum is via the Polygon POS Bridge. Users can deposit ETH or any other ERC-20 token to Polygon and then send them back to Ethereum mainnet. Deposits typically take a few minutes, while withdrawals back to mainnet take about an hour.

Polygon operates another bridge with Ethereum called Plasma, which is primarily used for withdrawing ETH to mainnet. However, the drawback is that all ETH withdrawals get locked for up to seven days before they can be redeemed on mainnet. 

Besides Polygon’s own bridges, Hop Network also allows for bridging ETH and other assets to Polygon. It uses liquidity pools to transfer tokens and has gained traction thanks to its quick deposits and withdrawal times. It usually takes no more than 10 minutes to deposit and withdraw to the bridge. 

SIMETRI Research
Sanctor Turbo Demo Day


Layer 2: Rollup Bridges

Optimistic Rollups are off-chain protocols managed by an on-chain Ethereum contract, allowing for cheaper and faster transactions than on Ethereum mainnet. Rollups compute off-chain, but they publish proofs on-chain, so the data can be rolled back to mainnet if there is an issue.

The two leading Optimistic Rollups are Optimism and Arbitrum, which have a combined total value locked of over 2.5 billion. The Layer 2 solutions have soared in popularity as DeFi projects like Uniswap and Sushi have announced plans to launch on the networks.  

To access Layer 2, users have to deposit funds into a bridge deployed on Ethereum mainnet, which credits the same funds on the rollup at the same specified address. While deposits to Layer 2 Rollups are finalized in a matter of 15 to 20 minutes, withdrawals have a seven day waiting period. 

Thousands of users have already moved funds from Ethereum mainnet to Arbitrum via the Arbitrum Bridge. Moving tokens to Optimism requires using a bridge called Optimism Gateway. The requests for deposits and withdrawals to these Layer 2 rollups can be made through a MetaMask wallet. 

As an alternative to the official bridge platforms, multi-chain liquidity solutions like Hop Network and Celer can also be used to make deposits and withdrawals to Arbitrum and Optimismm, with much faster withdrawal times. Both solutions can also make it possible to bridge ERC-20 tokens between two Layer 2 networks without moving to mainnet. 

Terra’s Shuttle Bridge

Terra is a rising DeFi hub built using the Cosmos SDK. Popular Terra dApps include Mirror Finance and Anchor Protocol. Terra operates a bi-directional bridge with Ethereum called Shuttle. 

The bridge was designed to move Terra-based assets to Ethereum via wrapping, but not the other way around. For this reason, only whitelisted assets can be moved back and forth between the two chains. To move funds from Ethereum, users must first convert ETH to Terra-based ERC-20 tokens such as wrapped UST. 

As shuttle does not support ETH, there is no way for users to bridge the asset directly onto Terra. However, users can stake ETH on Lido Finance and get staked ETH (stETH), which can be bridged to Terra through Lido’s interface on Anchor Protocol. stETH is wrapped to bETH, which can be used to earn rewards on Anchor.

Other Bridges in Development

Other non-EVM networks like Polkadot and Cosmos are building bridges, but most of them are at a very early stage of development. Cosmos will offer bridge services with the soon-to-launch Gravity Bridge, and there is another bridge being developed by Evmos. Similarly, ChainBridge plans to connect Ethereum to Polkadot’s Moonbeam parachain.

There are many more bridge solutions running or in development. As more Layer 1 and Layer 2 networks hoping to capture some of Ethereum’s market share see their ecosystems develop, bridges look set to make composable interoperability a reality over the coming years. 

Disclosure: At the time of writing, the author of this feature owned ETH and SOL. 

This news was brought to you by ANKR, our preferred DeFi Partner.


Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



A Beginner’s Guide to Terra’s DeFi Ecosystem

Terra is a Layer 1 blockchain protocol that aims to create a thriving payments-focused financial ecosystem offering interoperability with the real-world economy. Its two key ecosystem components are the so-called…

Cosmos Bridge to Ethereum Is Slated to Launch in 2021

A new Cosmos hub compatible with the Ethereum Virtual Machine will allow for cross-chain activity between the two blockchains. Cosmos Hub Plans to Launch Bridge A project focused on allowing…

Fantom Hits New All-Time High as Rally Continues

Fantom has surged to new highs as the race to secure a place in the multi-chain future intensifies.  Fantom in Price Discovery Fantom just hit a new all-time high. The…

What is a Crypto Airdrop: Why Projects Airdrop Crypto

Crypto airdrops occur when new tokens are freely distributed to different wallets in order to drive initial growth and build a community. They represent a popular marketing tactic that new projects use to spread…



Source

Tagged : / / / / /

Cosmos Bridge to Ethereum Is Slated to Launch in 2021

by Cryptobriefing

Key Takeaways

  • Evmos is a hub allowing Ethereum-based contracts to communicate within the Cosmos ecosystem.

  • The Evmos project is being rebranded from Ethermint, which launched in 2016.

  • The project is hoping to achieve full achieve full EVM compatibility for Cosmos by the end of the year.


Share this article



A new Cosmos hub compatible with the Ethereum Virtual Machine will allow for cross-chain activity between the two blockchains.

Cosmos Hub Plans to Launch Bridge

A project focused on allowing interoperability between the various EVM-compatible blockchains is launching on Cosmos.

Evmos, short for “EVM-on-Cosmos,” will allow Ethereum-based contracts to communicate within the Cosmos ecosystem.


Hubs act as relay chains that connect many other chains. The network currently has two other hubs: the Cosmos Hub and Kava.

Outlining the plans for Evmos in a blog post, Tharsis, the development team behind the project, said it would focus on “making it easy for [Ethereum] Smart Contracts to deploy and communicate within the Cosmos.”

Evmos was originally branded as Ethermint. It launched in 2016 to create a bridge to and from Ethereum. However, the team was unable to develop its original plans due to trademark issues. It’s since rebranded and adjusted its strategy.

SIMETRI Research
Sanctor Turbo Demo Day


In April, Tharsis received a grant of 100,000 ATOM (worth about $2 million at the time) from the Cosmos community pool to develop an ecosystem of EVM-based chains on the network.

Many other non-EVM Layer 1 blockchains like Polkadot and Solana have plans to support Ethereum contracts in one form or another. Ethereum is the most widely used blockchain; it’s become a hub for the rapidly-expanding DeFi and NFT spaces. Offering compatibility with the Ethereum Virtual Machine allows other blockchains to increase liquidity on their networks by supporting Ethereum assets.

According to the blog post, Evmos is aiming for Cosmos to achieve full EVM compatibility by the end of the year. Before that, though, it plans to launch a testnet. That’s scheduled to go live next week.

Disclosure: At the time of writing, the author of this feature owned ATOM and ETH.

Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



Meet Cosmos: The Internet Of Blockchains

Tendermint unveils its flagship program, the Cosmos Network, an interconnected system of blockchains aimed to solve scalability, trust and interoperability all at once.

What is Impermanent Loss and How can you avoid it?

DeFi has given traders and investors new opportunities to earn on their crypto holdings. One of these ways is by providing liquidity to the Automated Market Makers (AMMs). Instead of holding assets,…

Cosmos Adds Interoperability, Sending ATOM Higher

Cosmos has expanded interoperability with other blockchains, pushing the price of ATOM through a crucial resistance barrier.   Cosmos Opens the Interoperable Era In a nearly unanimous vote, ATOM token holders…

Acala Launches Update to Bring EVM DeFi to Polkadot

EVM+ by Acala provides an entry for Ethereum apps to get access to Polkadot’s multichain network.  MetaMask Comes to Polkadot via Acala Acala, one of Polkadot’s main DeFi hubs, has…



Source

Tagged : / / / /

What Is Avalanche? The Layer 1 Blockchain’s Ecosystem Unpacked

by Cryptobriefing

Key Takeaways

  • Avalanche is a Layer 1 blockchain that achieves high throughput and offers compatibility with the Ethereum Virtual Machine.

  • Network activity has soared in recent months, particularly in the DeFi space.

  • Avalanche’s EVM compatibility lets developers seamlessly port decentralized applications over from Ethereum. 




Share this article



As crypto heads towards a multi-chain future, Avalanche is gaining a significant amount of traction. 

Avalanche Explained

Avalanche is a fast-growing Layer 1 Proof-of-Stake blockchain and smart contracts platform. 

One of its most promising value propositions is offering low-latency block times of about one second. With high performance and full compatibility with the Ethereum Virtual Machine (EVM), Avalanche provides one of the best user experiences of any Layer 1 blockchains. 

As a scalable blockchain, Avalanche can achieve high throughput of 4,500 transactions per second while preserving adequate decentralization. Today, the network has the highest number of validators securing the network of any Proof-of-Stake protocol.

The Avalanche network is based on the Byzantine fault tolerance protocol first proposed in a 2018 paper released by a pseudonymous group called Team Rocket. Later, Cornell University professor Emin Gün Sirer and other researchers improved and formalized the protocol in a research paper. Soon after, Sirer began working on a smart contracts platform based on the consensus protocol. It was called Avalanche. After two years of technical development, Avalanche launched on mainnet in September 2020.

Many of today’s decentralized networks are built on old consensus protocols that may face scaling issues. In many blockchain networks, block consensus is achieved with voting from nodes, but such consensus systems may struggle with scaling as the number of nodes increases. 

In comparison, Avalanche establishes consensus with random node sampling. The unique consensus system, coupled with a variety of cryptographic techniques, ensures that all of the actors in the network are on the same page. 

Technical Architecture

Avalanche is currently the only blockchain that accommodates more than a single blockchain with its own consensus. This design differs from other networks that use a virtual machine and a blockchain.

In its current form, the Avalanche network consists of three integrated blockchains validated by a common set of validators: the Exchange Chain (X-Chain) for creating and exchanging assets, the Platform Chain (P-Chain) for creating subnets, and the Contract Chain (C-Chain) for EVM contract execution. 


The bulk of the activity happens in the EVM-compatible C-Chain. It enjoys finality of one to two seconds, which has helped it achieve rapid growth in the DeFi space. 

Centered on scalability and ease of use, Avalanche provides the tools needed to create customized blockchains called subnets or subnetworks. A subnet is an independent blockchain on the Avalanche network run by its own set of validators.

As it is fully compatible with Ethereum assets and tools, Avalanche can cater to diverse needs from the existing crypto developer ecosystem. Avalanche’s compatibility with the EVM lets developers seamlessly port their decentralized applications over from Ethereum. 

The network is compatible with MetaMask, the preferred Web3 wallet for Ethereum users. This means that DeFi users interacting with Avalanche have a similar experience to using Ethereum. Through the Avalanche Bridge, users can easily port their assets to Avalanche and enjoy the network’s cheap fees. 

The Launch of Avalanche Rush

In recent weeks, Avalanche has gained momentum in the DeFi space, like Solana and Polygon did before it through the first half of the year. According to data from DeFi Llama, the blockchain currently contains $2.91 billion in total value locked.

Although Avalanche has been live on mainnet for only a year, it already hosts an ecosystem of automated market makers (AMMs) and borrowing and lending protocols. It also supports various infrastructure projects consisting of wallets, oracles, storage and computing, and data analytics tools. 

Like many of its Layer 1 competitors, Avalanche Foundation has leveraged the AVAX token to incentivize the onboarding of new users onto the network. On Aug. 18, Avalanche launched a $180 million liquidity mining program called Avalanche Rush. Since the announcement, over $1.5 billion has been bridged from Ethereum, the network’s total value rocket has surged, and AVAX has jumped by over 200% in price. 

The program announced integrations of Aave and Curve, two of the most widely used Ethereum-native DeFi applications. To incentivize usage, rewards are distributed in the native AVAX token. The program motivated thousands of crypto users to move their assets onto Avalanche via the network’s bridge. 

The DeFi Ecosystem

Since Avalanche Rush launched, the Ethereum blue chips Aave, Curve, and SushiSwap have grown their presence on the network. However, it’s the Avalanche-native projects such as BENQI, Pangolin, and Trader Joe that have led the ecosystem’s growth. The vast array of DeFi protocols has presented many yield farming and arbitrage opportunities with high capital efficiency. 

SIMETRI Research
Sanctor Turbo Demo Day


Pangolin, a Uniswap clone, is the top decentralized exchange with the deepest liquidity on Avalanche. Similar to Uniswap, the platform allows users to swap between tokens. It contains $376.8 million in total value locked, while its weekly trading volume averages almost $1 billion. 

Trader Joe is another automated market maker for swapping tokens that has emerged in the last few months. Trader Joe already contains $729.6 million in total value locked, which is more than that of Pangolin. The platform lets liquidity providers earn governance tokens called JOE, and token holders can also earn protocol fees by staking JOE. 

The dominant project in the Avalanche ecosystem today is BENQI, a decentralized lending market that’s attracted $1.3 billion in total value locked since launching in August. The Avalanche Foundation launched a $3 million liquidity mining initiative with BENQI, with the project’s QI tokens and AVAX distributed to liquidity miners.

The network also hosts several yield aggregators similar to the likes of Yearn.Finance. The most popular aggregators are Yield Yak and SnowBall, which help liquidity providers automatically deploy their capital to optimiza the yield they earn on their holdings.

Furthermore, many NFT projects and marketplaces are expected to launch on the network as the space experiences rapid growth. One of the most popular Avalanche-based NFT projects today is Avax Apes, a collection of 10,000 randomly generated Apes living on the blockchain. 

The Future for Avalanche  

In 2021, Ethereum’s widely-documented scalability issues have driven many DeFi users to explore new blockchain ecosystems. Avalanche has benefited from a growing community of users and has spawned a promising DeFi ecosystem. 

To boost liquidity in the network’s developing DeFi ecosystem, the Avalanche Foundation announced a $230 million fundraise co-led by Three Arrows Capital and Polychain Capital this week. AVAX rallied to a new all-time high following the announcement.

As crypto, DeFi, and NFTs continue to attract more users, Avalnche is well-positioned to flourish. By offering compatibility with Ethereum, high-speed transactions, and a variety of popular DeFi applications, Avalanche is on the path to becoming one of the space’s top Layer 1 networks.

This news was brought to you by ANKR, our preferred DeFi Partner.


Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



Avalanche Breaks All-Time High on News of $230M Raise

Avalanche has closed a $230 million funding round led by Polychain Capital and Three Arrows Capital. Leading Crypto Investors Back Avalanche Ecosystem Avalanche has landed a $230 million investment to…

Avalanche Soars on Aave News, But Dip Looks Imminent

Avalanche is on a mission to scale DeFi and create a more accessible, decentralized, and cost-effective ecosystem. The recent developments surrounding the distributed ledger start-up have led to a spike…

How to Trade Using the Inverse Head and Shoulders Pattern

In stock or cryptocurrency trading, you may have heard of the term “inverse head and shoulders.” Also known as the “head and shoulders bottom” formation, the inverse head and shoulders chart pattern can…

Why is Avalanche Soaring?

As competition between Layer One protocols keeps heating up, one project in particular, Avalanche, is making big strides to secure its place at the top of the leaderboard.  DeFi Blue…



Source

Tagged : / / / /

Ethereum traders expect volatility ahead of Friday’s $820M options expiry

by Cointelegraph

Ether (ETH) will face a critical $820 million monthly options expiry on Friday, Aug. 27. That will be the first time that $3,000 and higher options will have a real fighting chance, even though bulls seem to have missed a good opportunity to dominate the expiry because they were too optimistic about Ether’s price potential.

It is unclear why $140 million of the neutral-to-bullish call options were placed between $3,800 and $8,000, but these instruments will likely become worthless as the monthly expiry approaches.

Competition and the success of interoperability-focused protocols impact Ether price

The Ethereum network has struggled due to its own success, which consistently leads to network congestion and transaction fees of up to $20 and higher. Furthermore, the rise of nonfungible tokens and decentralized finance imposed further stress on the network.

Maybe some of the inflow that was supposed to move Ether price up went to its competitors, which presented stellar performances recently. For example, Cardano (ADA) surged over 100% quarter-to-date as investors expect its long-awaited smart contracts to launch on Sept. 12.

Solana (SOL), another smart contract contender, captured one-third of the inflows to crypto investment products over the last week, according to CoinShares “Digital Asset Fund Flows Weekly.”

Lastly, layer-two scaling solutions like Polygon (MATIC) have also seen 150% gains after successfully bringing DeFi projects into its interoperability pool and launching a decentralized autonomous organization (DAO) to scale projects on the software development kits.

Ether options aggregate open interest for Aug. 27. Source: Bybt.com

Notice how the $3,000 level vastly dominates Friday’s expiry with 30,900 ETH option contracts, representing a $100 million open interest.

The initial call-to-put analysis shows a slight prevalence of the neutral-to-bullish call instruments, with 13% larger open interest. However, bears seem to have been taken by surprise because 83% of their bets have been placed at $2,900 or lower.

To succeed, bears need to push and hold Ether price below $2,900

Nearly half of the neutral-to-bullish call options have expiry prices set at $3,500 or higher. These instruments will become worthless if Ether trades below that price on Friday. The options expiry happens at 8:00 am UTC, so traders might expect some price volatility nearing the event.

Below are the three most likely scenarios that will likely happen and their estimated gross result. Keep in mind that some investors could be trading more complex strategies, including market-neutral ones that use calls and protective puts. Consequently, this estimation is somewhat rudimentary.

The simplistic analysis weighs the call (buy) options against the put (sell) options available at each strike level. So, for example, if Ether’s expiry happens at $3,050, every neutral-to-bullish call option above $3,000 becomes worthless.

  • Below $2,900: 36,360 calls vs. 32,700 puts. The net result is virtually balanced.

  • Between $2,900 and $3,000: 36,770 calls vs. 20,320 puts. The net result favors the neutral-to-bullish instruments by $48 million.

  • Between $3,000 and $3,200: 55,660 calls vs. 8,320 puts. The net result favors the neutral-to-bullish instruments by $147 million.

  • Above $3,200: 62,260 calls vs. 1,490 puts. The net result favors the neutral-to-bullish instruments by $197 million.

Bears will try to minimize the damage, and luckily for them, the honeypot for a favorable price move doesn’t look worthwhile of a significant effort from bulls.

As for the excessively optimistic options traders, they should better rethink their strategy for the September expiry. The Ethereum network seems to be its own biggest enemy because the increasing adoption has fueled the rise in competitors’ decentralized finance applications.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.