Ethereum Classic (ETC) Rallies Against Market After Launching Native Stablecoin

Ethereum Classic (ETC) expanded to $33.13, growing by nearly 22% in a week. Since it is considered undervalued, ETC has a pattern of following Ethereum (ETH) rallies. The ETC price hike also arrived after the network launched a new native stablecoin.

ETC accelerated its gains in the past few days, gaining momentum after months of limited price hikes. The coming days may bring additional attention to this token as its network prepares to halve its block reward.

The current block reward for ETC is 2.65 coins, going down to 2.048 ETC after the halving. The Ethereum Classic code was only changed to diffuse the Mining Ice Age, which the blockchain inherited after forking from Ethereum.

The halving event will keep ETC in the spotlight, though it will not have an immediate deflationary effect. ETC mining was very efficient, producing more than 147M tokens. At the same time, the more competitive ETH mining has produced around 120M tokens.

ETC is also fully in circulation, with no staking requirements. This means Ethereum Classic cannot host liquidity token projects like Lido DAO, or build a re-staking layer like Eigen Layer.

Ethereum Classic Spot, Futures Trading Picks Up

Trading volumes for ETC expanded in the past few days, rising 10 times their usual rate. ETC turnover reached $1.6B per day.

The ETC rally also gained support from the overall positive attitude following the approval of all ETH spot ETF products.

In addition to spot trading, ETC also sees an expansion in futures trading, expecting a more significant rally.

So far in 2024, ETC has only had relatively limited gains, growing gradually by 50% from a low of $15. The token also had a relatively low peak value of around $127.

Ethereum Classic Aims to Grow Ecosystem

In theory, Ethereum Classic should be capable of carrying similar apps as Ethereum. But for now, the growth of decentralized apps on the network remains limited.

Ethereum Classic still hosts four main DEX apps, with a total value locked (TVL) of $607.77M. The DEX saw its volumes rise in the past week as ETC moved closer to the $30 level.

For now, ETC does not host lending or liquidity farming apps. Like Ethereum, the mined network faces the challenge of scaling.

Will Ethereum Classic Host Stablecoins?

Ethereum Classic is one of the widely known networks, which still does not host its version of Tether (USDT).

One key reason for the slower adoption is that Ethereum Classic’s blockchain fell prey to 51% attacks as recently as 2020. Despite growing its hash rate, the network may still be vulnerable as more mining power is added.

For this reason, centralized exchanges often require many confirmations to deposit ETC or tokens based on that network. Coinbase goes as high as 3,000 block confirmations, requiring more time than usual in a highly dynamic market.

Despite the limitations, Ethereum Classic recently announced Classic USD (USC), its native stablecoin. The asset’s goal is to boost the liquidity of DeFi projects.

The selling point for the new token is that Ethereum Classic still has a $0.01 fee. This level of fees applies to around 22K active addresses per day and may grow with peak usage.

Ethereum Classic Miners Boost Production Ahead of Halving

Ethereum Classic mining activity is up by more than 60% since April. The growth before the Halving event is understandable, as miners aim to lock in more tokens.

However, the network also showed an outsized spike in activity back in 2022, suggesting there may be mining facilities to direct at ETC. This also means the risk of 51% attacks is not completely gone, and Ethereum Classic relies only on miners’ fairness.

Mining will also depend on ETC market performance. At the current prices, some miners may turn a profit with no need for new machines.

Cryptopolitan reporting by Hristina Vasileva