Bitcoin Forum

https://pbs.twimg.com/media/FaC6M-GXkAMa9u3?format=jpg&name=small (https://twitter.com/MoonOverlord/status/1558450208266240007/photo/1)

I was surprised when I saw this on Twitter. Because the hype on Ethereum during the past few months is very high because of "The Merge" where a lot of upcoming updates about Ethereum 2.0.

I am curious why the smart contracts that are being deployed on Ethereum are decreasing. Even last year we saw a massive spike in the price of Ethereum and even the GAS fees.

What could be the possible reason/s why it is decreasing?

I think there's nothing wrong with that and it's a natural process. Perhaps most of the contracts were empty or outdated and users simply destroyed them because they were no longer needed. Maybe users create fewer smart contracts due to expectations of Ethereum's transition to PoS.

How does the situation look like on smart contract platforms with a reliable longer-term PoW perspective?

It should decrease, that high gas fee made Ethereum a bit safer from scammers who create shitcoins, they all move to BNB smart contract to carry out their deeds, anyways, now that Ethereum is moving back to POS and abandoning the PoW algorithm there will be new projects developing on Ethereum more.

Maybe the people who are getting involved in ETH just decreased and not going to be able to put more impact at the rate that it is now. I think that the point in checking is that they are having ETH as something profiting and not as project creation or something like that. Maybe they are trying to HODL only and therefore less movements in the blockchain.

we are still in the recovery process and still in a bear market maybe that's the cause where the developers don't make many smart contracts for their projects considering that transactions on the ETH network look quiet and after 2 years I just saw the cost of GAS ETH yesterday around 4 Gwei and that also means that not too many people do transactions on ETH so that's also why developers don't make smart contracts, I still see spammers making NFT smart contracts and it's boring there

IMO, why a few months ago the ethereum smart contract became hype and is currently dwindling is, because most likely a lot of developers are excited about the development of ethereum 2.0 which is coming soon. so they are enthusiastic about developing it. however, due to the hefty fees to date, I don't think too many people choose to invest in coins that have smart contracts from ethereum. Yeah, I've felt that myself. limitations in making transactions, waiting for gwei to drop or very large fees are the problems of this.

It's probably because:

1. bear market
2. other projects are using alternative, there are competition out there for all we know
3. PoS merger, maybe projects thinks that it might not look at them as Ethereum is getting more centralized.

As far as the price right now, it's due to the hype, it was successful merger on the testnet level. Imagine the hype that it created, then next month it will be in their mainnet.

Do you know that there are tons of projects that failed to launch because we are in a bear market? It's the same thing for projects that aren't even out yet, the fact is many projects are born in a bull market either on erc20 or other but in bear market things will slow down.

Since we are in a bear market, the decrease in the number of contracts seems normal to me. Just like everything else in the market, the activation decreased. In erc20 contracts, this decrease should have already happened. when there is a backlog then gas prices also increase and more projects emerge. It's just a classic loop. Returns to normal after the recovery process is over.

most likely, this is due to the high price for gas, because many projects are looking for an alternative to the ETH network at the transaction price, the community needs it first of all, for example, I have not used this network for a very long time, because of expensive transactions. That's how ETH will switch to POS, then we will see the opposite picture.

In bear market, scam projects will turn to walking death or totally death. From investor and user side, they will have less activities in investment, trading, playing so less trading volume.

Developers more likely to be less active in bear market. Only very strong teams will keep focusing on developments in bear market. Those rare developer teams know that in bear market, they can focus on development and take advantage of their products built in bear market to get boosters for their projects in next bull market.

I'm not surprised, by that report because, during the peak increase of Ethereum gas fees, many projects are looking to other networks as alternatives, and we all know that the smart contract services today are no longer monopolized by Ethereum so possibly that was the main reason why the smart-contracts deployed on Ethereum network was decreasing temporarily.

A higher fees and the bear market most probably, also many choose to hold instead because they know ETH can still rise again and many are very optimistic with the current update so for sure, when the price increase that contracts will follow and starts to recover again. Honestly, there's a lot of reason for this and personally I do stop using ETH when the fees becomes more expensive than what I'm trying to transact, investors will come back if they saw big change with the merge, give some time for now.

I know that people are sick and tired of Ethereum gas fees and they don't have much faith in Ethereum long term because the merge does not increase TPS and neither will the upcoming sharding upgrade because that sharding is data sharding for L2's only. This is why projects are moving in mass to other chains like Polygon. I know that MAXX finance and several other simila DeFi platforms (like Qi DAO) chose Polygon specifically over Ethereum for similar reasons.

Lesser projects when the market isn't doing good and that's why we see the smart contracts being deployed are lesser this time. Wait until the bull run comes and there we go, we'll see that this chart is going to be up again.
The condition of the market is always the catalyst for such results and statistics but eventually, we'll see it grow then. Although it's not that much of a concern to most of us if we're just holders or investors but we're wanting to see information like this as they're interesting and also part of our research.

This is a weird misconception that POW miners try to push for us. POS isn't any more centralized then with POW mining. Miners are just panicking that their rigs might be worthless after POS. POS has pretty much solid game theory behind it and it makes way more sense then trying to grow bigger and bigger pools and farms that funny enough are making current eth already centralized.

But your points on 1 and 2 are spot on.

i am agree on point number 2, since other layer 1 chain build and offer more advantages especially in gas fee, developers team prefer using other blockchain. They heard traders or investors complaint that said eth gas too high and make it not profitable anymore trade eth token. But if eth could solved this problem , i am believe its problem will disappear and smart contract deployed will increase again.

Make sense. This is also what I think, because of competitors.
If you take a look at the chart, the decline started at mid-year 2020, which that the start when the market recovered and a lot of Ethereum alternative smart contract platforms popped and their TVL grew too fast just like Solana, Binance Smart Chain, Avalanche, etc.

The bear market? Isn't that obvious? We are in a bear market right now and that is why we are dealing with something that is taking a lot of projects by surprise and that's fine. I mean at the end of the day if we are talking about just ETH, then we need to talk about the whole market.

The money that got out of crypto in general, the amount of projects that stopped getting funded, the lack of funding and many other things all caused by the general economy of the world equals to ETH not having many smart contracts deployed.

During the bull market when everyone was making money, we have seen that it was amazing and it got to a point where it is definitely a great deal.

Do you have the latest data up to July? Cause this is already in everyone's expectations. The rush of new projects on the ETH smart contract slows down since ETH's price keep increasing in the last years. ETH ATH in Oct-Nov 2021 which we can see a massive cut-off from before there that. BNB, Sol, Matic,... greatly benefit from ETH's expensive transaction gas gwei. This is a reason why I support PoS cause after that, ETH will start to address the fees problem.

There could be several explanations for what we see on that graph, maybe developers are just being cautious and prefer to wait for the merge to happen before deploying their smart contract, or maybe they cannot wait for the merge to happen and decided to change the platform where they were going to release their smart contract, and finally this could be simply the effects of the bear market we are going through and it is affecting not only the price of ethereum but the amount of smart contracts as well.

maybe other chain give more advantages for developers and community it self. As we know eth chain have high fees in several months ago and retail traders prefer to stop rather than must paid high fee. Nah , eth competitors offer solution from this problem , they have llw gas fee and responded well by investors and community.

I do believe that simple affects of bear market would be the smartest answer to this. I believe that it is mostly about that and nothing more. I am not saying that there isn't a situation where we can't see ethereum going up again, there will be a situation where bull market will come back and we will see ethereum doing amazingly and that sounds like a very possible situation.

Of course, not everyone thinks that this will be the situation, some believe ETH is gone because of the proof of stake situation coming and miners leaving. But I do not believe that, as long as projects still start their projects on ETH, it will continue to survive and be big.

I guess that is a good analysis, there should be something that causing the decreasing smart contract.
'The merge' is not a good idea for me because changing the coin's algorithm will affecting the overall aspect of the coin, coin value is one of the aspect.