What is EtherZero coin?
It’s like Ethereum, but without all of the calories. That is, if calories mean real world adoption and value. ETZ originated in 2019 after the regular Ethereum network had a hard fork. The project started with an aim to bring smart contracts and decentralized finance to more users. Note that Ethereum has since already done this. ETZ has nobly eliminated fees, something that are a huge problem on the Ethereum network to this day, but decrease once Ethereum 2.0 is released.
Tokenomics of ETZ
When the hard fork to create ETZ happened in January of 2018 all users who held Ethereum were awarded one ETZ coin for each ETH they held. This means about 97 million ETZ were awarded in this event. The coin’s total supply is 194 million, double the amount of coins awarded in the hard fork. The additional 97 million coins were reserved for additional ETZ project development, even though there hasn’t been much of this. This means that 97 million ETZ coins have more or less been reserved for the founders and developers themselves.
This is where ETZ might have some trouble passing the shitcoin test. Keep in mind that by my definition memecoins and shitcoins all have two things in common:
1) They don’t provide any real-world economic value
2) They exist solely to make their creators rich.
These tokenomics of 50% of the coin’s supply being owned buy ETZ’s developers means the developers are likely looking to get rich. When the price of the coin increases, the founders and developers will dump the coin, as I’m sure they did in March-April of 2021. The ETZ network is thus split into two crowds- the early adopters/profiteers (founders/developers) and the bag holders (the rest of us). This is a red flag for me. Conscientious project creators do the very best they can to make tokenomics equitable and avoid concentration.
Features of ETZ
In addition to not having gas fees, Ether Zero also has faster transaction speeds, claiming up to 10,000 transactions per second. This is loads better than Ethereum now and even Ethereum after the 2.0 release. Speed often comes at the price of centralization. The Ether Zero network is Proof of Stake with Masternodes, each of which must have 20,000 ETZ to participate. The use of masternodes makes the network more centralized and thus vulnerable to attack. ETZ does currently host some dApps, including a game called UnicornGo.
ETZ Price Action
ETZ coin has had very little trading volume for 90% of its short life. The only exception was in the February-May 2021 rally, when the coin went 10x, and then within 90 days crashed to its original price of $0.0012 before the pump.
This happened only because of the resemblance in the coin’s name to Ethereum, which surged in popularity at the same time. It’s the same with coins like Bitcoin Cash, which don’t offer the same functionality and value as Bitcoin but have the name ‘Bitcoin’ so people go nuts. Looking at the chart, we can see the infinitesimal trading volume ETZ has had, the spring 2021 surge, and the quick death.
In order for cryptocurrencies to have sustainable price growth, there has to be strong underling fundamentals. This means there’s a use case for the coin. In Bitcoin’s case, it’s a store of value and a hedge against inflation. It also has a network that is near impossible for bad actors to hack or ban. ETZ doesn’t have much of a use case.
Not financial advice here, but I’d steer clear of this project and invest in actual Ethereum. My crypto portfolio is made up of primarily large caps like BTC and ETH for a reason- they will hold value better in downturns, have solid use cases, and solid tokenomics. I always encourage investing in projects you truly believe in, and the truth here is that ETZ just hasn’t seen much in the way of smart contract and dApp adoption.