Ethereum (ETH) has always showcased its competency as an open-ended decentralized software platform. It is one of the selling points of the world’s second most-used cryptocurrency. However, PayPal Holdings, Inc.’s (PYPL) announcment on Monday that it would be introducing its own U.S. dollar-pegged stablecoin, PayPal USD (PYUSD), could spark some serious debate.
PYUSD is an Ethereum-based stablecoin, which would, after introduction, be pegged to the value of the U.S. dollar. It has been designed for digital payments and the web, and will soon be available for U.S. customers. But even as this is bound to push Ethereum stocks up by establishing its place as the money layer on the Internet, it will also hit the crypto coin’s core value of decentralizing.
Centralization issues are the most common attack areas within the gamut of decentralized finance or DeFi, one of the crypto world’s main differentiating features. In 2021 alone, DeFi hacks amounted to no less than $10 billion, revealing patterns of how the transactions are classified and tracked. Now, with around 430 million accounts actively using PayPal, the chances of cluster attacks would go up.
Many smart contract auditors have highlighted that the PYUSD algo contains “freezefunds” and “wipefrozenfunds” functions, which are textbook examples of centralization attack vectors. Concerns have also been raised about the digital contract that users would sign, and that these contracts resemble censorship-enabled central bank digital currency.
Despite this, Ethereum would get a massive boost once the project goes live. It would finally give Ethereum the mainstream push that it has been seeking all these years in its competition with Bitcoin (BTC). Coupled with the Shanghai Upgrade, under which it shifted its blockchain validation system from proof-of-work to proof-of-stake, this might be ETH’s year.
Powered by these developments and what has largely been hailed as a crypto rebound, the price of Ethereum has soared 53.9% this year as of Aug 8. So, with Ethereum getting this push, it might be prudent to keep a watch on stocks exposed to this open-source blockchain platform, decentralized or not.
Accenture plc ACN is a global system integrator that provides consulting, technology and other services, and markets Ethereum-based blockchain solutions to businesses to make it easier to process payments.
Accenture’s expected earnings growth rate for the current year is 8.2%. The Zacks Consensus Estimate for its current-year earnings has improved by 0.1% over the past 60 days. Accenture currently carries a Zacks Rank #3 (Hold).
CME Group Inc. CME operates as one of the world’s largest futures exchanges and offers a wide range of derivatives contracts. It provides various solutions to invest in cryptocurrencies like Ethereum.
CME Group’s expected earnings growth rate for the current year is 13.6%. The Zacks Consensus Estimate for its current-year earnings has improved by 3.4% over the past 60 days. CME Group currently carries a Zacks Rank #2 (Buy).
Cisco Systems, Inc. CSCO is a tech giant that manufactures and sells hardware, software, and telecom equipment. Cisco was one of the first and foremost backers of Ethereum when it joined the Enterprise Ethereum Alliance back in 2017. In 2019, the company championed the widespread adoption of crypto on a global scale in a released report.
Cisco’s expected earnings growth rate for the current year is 13.1%. The Zacks Consensus Estimate for its current-year earnings has declined 0.3% over the past 60 days. Cisco currently carries a Zacks Rank #2.
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