In recent news, a single trader has spent an enormous amount of money on gas fees to purchase a memecoin called Four (FOUR) on the Ethereum network. The trader paid $118,000 in gas fees using Ether (ETH) to buy $155,000 worth of FOUR tokens through a Uniswap trade. The trade involved swapping 84 Wrapped Ether (WETH) for 13.8 billion FOUR tokens.
The trader voluntarily increased their gas fee to speed up the transaction time and has reportedly gained 133 ETH ($245,667) in unrealized profit on their investment in the memecoin. However, this raises the question of whether the rise in gas fees is sustainable for mass adoption, as many have criticized the fees for being too high.
The Ethereum network has been facing a lot of criticism for its gas fees, which have been increasing due to the rise in activity on the network. Some prominent Ethereum advocates have praised the heightened activity for its revenue-generating effects and long-term deflationary pressure on the supply of Ether. However, others have claimed that mass adoption will never be achieved if the network remains unaffordable.
Another major reason behind the drastic uptick in gas fees is the maximal extractable value (MEV) trading bot that is front-running memecoin trades en masse. A pseudonymous attacker known only as jaredfromsubway.eth has been profiting significantly from the heightened network use. The attacker has been using a sandwich attack to manipulate the price and profit from the user.
A sandwich attack occurs when an attacker “sandwiches” a victim’s transaction between their two transactions. Jared has cleared a whopping $950,000 in profits from the sandwich attacks alone. On April 20, Jared used 7% of the total gas on the network and spent 455 ETH in transaction fees.
In conclusion, the rise in gas fees on the Ethereum network has caused debates in the crypto community over its impact on mass adoption. The attacker, jaredfromsubway.eth, has been using a sandwich attack to manipulate the price and profit from the user. While some advocate for the heightened activity, others have criticized the fees for being too high, and it remains to be seen whether the network will become more affordable for mass adoption.
The Ethereum network has been experiencing a surge in gas fees due to the ongoing memecoin frenzy. As a result, the network’s daily revenue has skyrocketed and has even surpassed that of Bitcoin. However, while some Ethereum proponents celebrate the growing revenue, many others are concerned about the network’s growing congestion and the difficulty in processing transactions.
According to recent reports, there has been an unusual shift in the top 10 gas-burning altcoins. Instead of the usual suspects like ETH, WETH, and USDT, memecoins such as TROLL, APED, and BOBO have become the top 10 spenders. The average gas price for Ethereum transactions as of April 20 was 81.94 gwei, which is a significant increase from 60.82 gwei on April 19 and 44.42 gwei last year.
Independent Ethereum educator Anthony Sassano noted the surge in daily fee revenue of the Ethereum network and pointed out that the network had brought in 28 times the revenue of Bitcoin. He also mentioned Ethereum layer-2 platforms like Arbitrum One that have outperformed the BTC network in terms of daily revenue due to the ongoing meme frenzy.
Ethereum proponents argue that the high gas fee and subsequent higher revenue highlight the network’s growing usability. However, many on Crypto Twitter were quick to point out that the extensive usage they are referring to is just a few thousand users gambling on memecoins. Some users have even paid gas fees as high as a few hundred dollars, while others complained about having to pay a higher gas fee than the actual transaction.
The soaring gas fees were also blamed on a Maximal Extractable Value (MEV) trading bot that is front-running memecoin trades on a massive scale. The bot in question, jaredfromsubway.eth, has been the top gas spender in the last 24 hours, spending 455 ETH ($950,000) and using 7% of the total gas of the network. In the last two months, it has spent more than 3,720 ETH ($7 million) in gas fees and performed more than 180,000 transactions. The Subway-themed bot is using the sandwich trading technique to pocket millions of dollars while congesting the network at the same time.
This situation highlights the need for Ethereum to address its scalability issues and find a long-term solution to address the increasing demand for memecoin trading. The current frenzy may be beneficial for short-term revenue, but it is also causing significant congestion and higher fees for users. The Ethereum network needs to find a balance between profitability and usability to ensure the long-term sustainability of the network.
In conclusion, the growing memecoin frenzy has caused Ethereum’s gas fees to skyrocket and has resulted in a surge of revenue for the network. However, it has also highlighted the growing congestion and difficulty in processing transactions. The Ethereum network needs to find a long-term solution to address its scalability issues and find a balance between profitability and usability to ensure its long-term sustainability.
USD Coin (USDC), a popular stablecoin pegged to the U.S. dollar, has been facing solvency concerns since March 10, leading several holders to panic sell their holdings and switch to other stablecoins. USDC’s solvency fears arose after the disclosure that a portion of USDC’s collateral is held at Silicon Valley Bank, which was shut down by California authorities after revealing efforts to raise extra capital. The news of the bank’s closure and USDC’s collateral in it caused concern among USDC holders, leading to panic selling and mass exodus.
During the panic selling, several USDC holders attempted to switch to other stablecoins, but not all of them were successful. One user lost over 2 million USDC in a failed attempt to exchange them for Tether (USDT) using KyberSwap’s decentralized exchange aggregator. KyberSwap is a decentralized exchange (DEX) that aggregates liquidity from several DEXs. In the transaction, the user dumped a large amount of 3CRV (DAI/USDC/USDT) into USDT using KyberSwap’s aggregation router. In a postmortem, the KyberSwap protocol team explained that “since the market was undergoing a volatile period, all routes failed at estimating gas. The rate strongly fluctuated & only 0x’s route was successful but with a very poor rate.” After confirming the swap at 0x’s rate in a pop-up, a bot detected the opportunity and gained 2,085,256 USDC from that Univ2 pool. The protocol is in talks with the bot creator, the bot user, and third parties to assist with funds recovery.
Meanwhile, Tron founder Justin Sun reportedly withdrew 82 million USDC and exchanged them for Dai (DAI) using Aave v2, a decentralized finance protocol. The move came after Circle, the company behind USDC, disclosed holding $3.3 billion at the Silicon Valley Bank, nearly 23% of its reserves. While Circle assured USDC holders that liquidity operations would “resume as normal when banks open on Monday morning in the United States,” many holders remained unconvinced.
Wallets related to IOSG Ventures sold 118.73 million USDC for 105.67 million USDT and 2,756 Ether (ETH) worth $3.98 million via three addresses, on-chain data shows. The institution still holds nearly 45 million in USDC. These movements suggest that USDC holders were not confident about the stablecoin’s solvency and were trying to move their funds to other stablecoins or cryptocurrencies.
Despite the panic selling and exodus, the USDC price has slowly recovered after turbulent trading hours on March 11 to trade at $0.97 at the time of publication. However, the incident has once again highlighted the risks associated with stablecoins and the need for transparency and oversight in the crypto industry. The incident also underscores the importance of decentralized exchanges and protocols that offer users greater control and security over their assets.
While the USDC panic selling was a localized event, it could have wider implications for the stablecoin industry as a whole. Stablecoins have become increasingly popular in recent years due to their stability, ease of use, and ability to serve as a bridge between the traditional financial system and the cryptocurrency market. However, their rapid growth has also led to concerns about their regulation, oversight, and long-term viability.
Stablecoins are not backed by any physical asset but instead rely on a basket of assets or a reserve pool of funds to maintain their peg to the U.S. dollar or other currencies. This makes them vulnerable to market fluctuations, liquidity crises, and other risks that can undermine their stability and solvency.
In response to these concerns, regulators and industry players have called for greater transparency and oversight in the stablecoin industry. In September 2020, the Office of the Comptroller of the Currency (OCC) issued guidance allowing banks to hold reserves for stablecoin issuers, signaling greater regulatory support for the industry.
In addition, several stablecoin issuers have taken steps to increase transparency and accountability, including regular audits and disclosures of their reserve holdings. For example, Paxos, the issuer of Paxos Standard (PAX), a stablecoin pegged to the U.S. dollar, recently announced that it had obtained regulatory approval from the New York State Department of Financial Services (NYDFS) to offer its stablecoin to institutional clients.
Overall, while the USDC panic selling was a cause for concern for USDC holders, it also highlights the need for greater transparency and oversight in the stablecoin industry. Stablecoins are an important and growing part of the crypto ecosystem, but their stability and solvency depend on trust and confidence from users and regulators alike. As the industry continues to mature, it will be essential for stablecoin issuers and regulators to work together to address these challenges and ensure the long-term viability of stablecoins as a reliable and trustworthy form of digital currency.
Ethereum fees remain high as the network continues to see some of the highest traffic in the industry. Daily transaction volumes put Ethereum in the billions per day and all of these transactions carry a higher than average fee. This fee structure which has caused concern among users seems to not be going anywhere, but there looks to be a light at the end of the tunnel.
Recently, the average transaction fee for Ethereum transactions has dropped significantly. In the past week, the average transaction fee for ETH transactions topped 35% in total, but it still remains on the high side compared to other blockchains.
Ethereum Fees Are Down
Data from BitInfoCharts shows that Ethereum fees are down over the past week. It correlates to a 35% drop in fee rates, however, the blockchain remains one of the highest in terms of fees. Leading up to last week, transaction fees were averaging around $50 per transaction. With the recent decrease, this number has now dropped to $35 on average per transaction.
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This is expected given the amount of activity the blockchain houses but it is still on the high side. According to this report, Ethereum users are paying about $40 million in fees daily, whereas rival Cardano only sees about $87K spend in fees on an average despite recording almost identical transaction volumes as ethereum.
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ETH trading at $3,257 | Source: ETHUSD on TradingView.com
The median gas fee for the network sits at about 0.0047 ETH or $14.78 for each transfer, considerably higher compared to other leading blockchains in the space. ETH miners are also getting some of the highest miner rewards, ahead of bitcoin miners. This fee structure is a pain point that is expected to be addressed in the move to ETH 2.0 in the coming year.
ETH Getting Ready For A Pump?
The decrease in transaction prices could spell good news for the digital asset. With transaction fees tumbling, it would allow for faster transactions. Also, with transaction fees down, it most likely means that more investors are opting to hold on to their digital assets rather than deciding to move them around, which could point to consolidation and accumulation on the part of these investors.
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With less ETH moving around on the network and onto exchanges for sale, then supply on exchanges are down during this time. Usually, notable recovery periods are preceded by periods of stretched out accumulation, where investors choose to pile on to their current holdings.
This, in addition to the fact that the price of the digital asset has been dropping for a while and is primed for a correction, ethereum may be getting ready for a bounce-back towards $3,500.
The most popular antivirus, Norton 360, made a miner out of everyone. Even though this has been going on for a while, the Internet recently found it out. And traditional Norton customers are livid about it. One of the most controversial parts of the story is the 15% cut that the company takes. This is a commercial program that you have to pay for, so it’s only logical that people are not ok with it.
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Of course, Norton’s Ethereum mining program is nothing new. Seven months ago, when they were testing it,our sister site Bitcoinist reported on itand said:
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“A select number of Norton 360 customers, who joined the early adopter program, received their invites to mine Ethereum today. The program is expected to expand to include all 13 million Norton customers in the coming months.
In explaining the odd pairing, the firm said cryptocurrency mining is fraught with risk and often involves disabling security and allowing “unvetted code”. This leaves miners vulnerable to skimmed earnings and ransomware. Norton claims to address these issues by enabling users to safely and easily mine cryptocurrency through the user-friendly Norton 360 platform.”
Ok, so it’s for your own good. How could you doubt the fine folks at Norton?
The Internet Discovers The Existence Of Norton ’s Ethereum Program
The mining program went viral when Boing Boing editor Cory Doctorow tweeted, “Norton “Antivirus” now sneakily installs cryptomining software on your computer, and then SKIMS A COMMISSION.”
This is fucking wild. Norton “Antivirus” now sneakily installs cryptomining software on your computer, and then SKIMS A COMMISSION. https://t.co/6s2otyCd78
— Cory Doctorow (@doctorow) January 4, 2022
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Security expert and journalistBrian Krebs took a look at the caseand here’s what he came up with:
“According tothe FAQ posted on its site, “Norton Crypto” will mine Ethereum (ETH) cryptocurrency while the customer’s computer is idle. The FAQ also says Norton Crypto will only run on systems that meet certain hardware and software requirements (such as an NVIDIA graphics card with at least 6 GB of memory).”
That doesn’t sound that bad. Plus, “NortonLifeLock says Norton Crypto is an opt-in feature only and is not enabled without user permission.” Ok, but, is the “accept” button checked from the get-go? And, why can’t people uninstall the program then? In a written statement, NortonLifeLock responded:
“If users have turned on Norton Crypto but no longer wish to use the feature, it can be disabled by temporarily shutting off ‘tamper protection’ (which allows users to modify the Norton installation) and deleting NCrypt.exe from your computer.”
ETH price chart for 01/08/2021 on FTX | Source: ETH/USD on TradingView.com
What Was The Public’s Response To The Fact That They Are Ethereum Miners?
According to Krebs, “longtime Norton customers were horrified at the prospect of their antivirus product installing coin-mining software, regardless of whether the mining service was turned off by default”. This is what the program should protect them from. And they don’t know that this is for their own good and they should trust the Norton corporation blindly.
On the other hand, the ones that were ok with it and wanted to collect their ETH faced another hurdle. Gas fees. If that fact is hard to navigate for experienced Ethereum users, imagine what it was for novices that weren’t even aware of their new profession as Ethereum miners. To help with visualization, just read the Norton FAQ’s explanation:
“Transfers of cryptocurrencies may result in transaction fees (also known as “gas” fees) paid to the users of the cryptocurrency blockchain network who process the transaction. In addition, if you choose to exchange crypto for another currency, you may be required to pay fees to an exchange facilitating the transaction. Transaction fees fluctuate due to cryptocurrency market conditions and other factors. These fees are not set by Norton.”
Even though what they’re saying is correct, how would a civilian react to the past year’s ridiculous Ethereum gas fees?
Summary And Conclusion, The Norton Situation
For a quick assessment of the situation, we turn to resistance.money’s Bradley Rettler, who tweeted. “What?! Norton antivirus now mines Ethereum *by default*. The “accept” button is checked automatically and once installed it’s very difficult to remove. And they take 15% of what you mine!”
What?! Norton antivirus now mines Ethereum *by default* — the “accept” button is checked automatically and once installed it’s very difficult to remove. And they take 15% of what you mine! https://t.co/5OXDE76KEA
— Bradley Rettler (@rettlerb) January 6, 2022
Yeah, that’s about it. For the implications, we go back to security expert Brian Krebs:
“I guess what bothers me most about Norton Crypto is that it will be introducing millions of perhaps less savvy Internet users to the world of cryptocurrency, which comes with its own set of unique security and privacy challenges that require users to “level up” their personal security practices in fairly significant ways.”
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That seems to be about right as well.
What would the Proof-Of-Work critics say, now that half of the planet is an Ethereum miner? And what will happen to the program once Ethereum turns to Proof-Of-Stake? Burning questions.
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Ethereum co-founder Vitalik Buterin has put his thinking cap on again in an attempt to improve the current fee structure for the network.
The proposal titled “Multidimensional EIP-1559” was laid out in a blog post on Jan. 5 in which Buterin noted that different resources in the Ethereum Virtual Machine (EVM) have different demands in terms of gas usage.
He added that there are different limits for short-term “burst” capacity as opposed to “sustained” capacity within the EVM citing examples of block data storage, witness data storage, and block state size changes.
“The scheme we have today, where all resources are combined together into a single multidimensional resource (‘gas’), does a poor job at handling these differences.”
The problem is that channeling all the different resources into a single one leads to “very sub-optimal gas costs” when these limits are misaligned, he added.
Buterin outlined his fairly complicated proposed changes with a lot of technical math, but in a nutshell, the proposal offered two potential solutions using “multidimensional” pricing.
The first option would calculate the gas cost for resources such as call data and storage by dividing the base fee for each unit of resource by the total base fee. The base fee is a fixed-per-block network fee included in the EIP-1559 algorithm.
The second more complex option sets a base fee for using resources but includes burst limits on each resource. There would also be “priority fees” which are set as a percentage and calculated by multiplying the percentage by the base fee.
He stated that the drawback to the multidimensional fee structure is that “block builders would not be able to simply accept transactions in high-to-low order of fee-per-gas.” They would have to balance the dimensions and solve additional mathematical problems.
Related:Ethereum supply flips briefly into deflation as gas fees spike
It remains to be seen whether the proposal will be passed since the priority at the moment is the next big upgrade. The Ethereum network is currently gearing up for “the merge” which will dock the Ethereum blockchain with the Beacon Chain and effectively end Proof-of-Work. Testing is already occurring on the Kintsugi testnet and full deployment is expected in the first quarter of this year.
EIP-1559 was deployed in August as part of the London upgrade to burn a portion of the transaction fees in order to make gas pricing more predictable. Since it went live, 1.36 million ETH worth approximately $4.7 billion at current prices has been destroyed according to the burn tracker.
Vitalik Buterin has shared a new proposal called “multidimensional EIP-1559.”
The update would affect Ethereum’s gas fee markets, and the base fee charged for different resources within the Ethereum Virtual Machine.
EIP-1559 was introduced in August to make Ethereum gas fees more predictable. It involves burning a portion of ETH with every transaction, in turn making the supply more scarce.
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Vitalik Buterin has published a new piece addressing Ethereum gas fee markets. Specifically, he discussed launching a new “multidimensional” EIP-1559 update.
Vitaik Buterin Makes New Ethereum Proposal
Vitalik Buterin has proposed a new update for Ethereum.
In a new blog post, Buterin haslaid outtwo options for the implementation of what he called “multidimensional EIP-1559.” In it, he discussed Ethereum’s gas fee markets with respect to different resources, making specific reference to usage of the Ethereum Virtual Machine, block data, witness data, and state size filling. Currently, Buterin pointed out, these resources are bundled into a “single multidimensional resource.”
The trouble, Buterin wrote, is that the current system does not handle differences in limits for the various resources in the Ethereum Virtual Machine efficiently. Buterin explained how transaction data plus calldata transaction consumes only 3% of the gas in a block as an example. Buterin added that some blocks could contain 67 times more data than an average block.
Buterin made reference to two limits in the Ethereum Virtual Machine as a solution to the problem: burst capacity and sustained capacity. While Buterin referred to burst capacity as the capacity that could be handled in “only one or a few blocks,” sustained capacity is the capacity that could be comfortably supported in the long term.
With multidimensional EIP-1559, Buterin has proposed introducing a “burst limit” and a “sustained target,” where the quantity of the resource in any given block would not exceed the burst limit, while also approaching an average long-term consumption equal to the sustained target. This would allow for distinct targeting EIP-1559 targeting schemes to be used for each distinct resource.
EIP-1559 is one of Ethereum’s most significant updates of recent years. It launched as part of the London hardfork in August and introduced a base fee on Ethereum transactions in order to make gas fees more predictable on the network (it previously used a bidding system). Crucially, the base fee also gets burned, which makes the supply of ETH more scarce. After the merge to Proof-of-Stake, ETH could potentially become a deflationary asset due to EIP-1559.
Buterin laid out two options for introducing multidimensional EIP-1559. In the first option, the gas price for resources such as calldata and storage use would be calculated from by dividing the base fee for one unit of resource by the base fee. The other more difficult option would involve setting the base fee for using resources at a price, such as 1 wei.In contrast to the first option, in this case there would be no block gas limit, but rather burst limits on each resource. Priority fees would also be different as they would be based on a percentage, where block producers would receive priority fee payments equal to the base fees multiplied by said percentage.
Buterin received mixed responses to the proposal. “I think this would be a reasonable suggestion although I imagine it would be a significant engineering undertaking,” Obel Network’s Oisin Kyne commented. Optimism’s Karl Floesch added that he was concerned about “EVM backwards compatibility” and thought the first option was more realistic, leading Buterin to respond that he agreed it would be “a less risky change.”
Either way, it’s unlikely that the change will be implemented on Ethereum anytime soon. The network is currently preparing to merge to Proof-of-Stake in what will be its most significant update to date. It’s scheduled to happen sometime in the first half of this year; the Kintsugi testnet is live now. After that, sharding will follow, so it could be some time before any further EIP-1559 adjustments are implemented.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
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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.
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Vitalik Buterin has stated that Ethereum is not ready for mass adoption in its current form.
High gas fees on Ethereum Layer 1 make the network unsuitable for day-to-day transactions.
Buterin has also reiterated the need for Layer 2 scaling solutions to reduce transaction fees.
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Vitalik Buterin has addressed Ethereum’s scalability issues, reiterating that gas fees need to be lower and stating that the network is not ready for mass adoption in its current state.
Ethereum Needs Layer 2
Vitalik Buterin has reiterated the urgent need for Ethereum scaling solutions.
In the latest Bankless podcast, the Ethereum co-founder discussed the network’s development over the past year and plans to scale in the future.
While Ethereum has made significant strides in 2021, such as the London hardfork that included the fee-burn mechanism EIP-1559, it still suffers from high gas fees.
On the topic of fees, Bankless co-host Ryan Sean Adams questioned Buterin over statements he made in 2017 that “the Internet of money should not cost five cents a transaction.” Adams asked if he still held the same view despite Ethereum transactions costing more than 100 times that amount today. “Of course I do,” replied Buterin. “In order for blockchains to be something that people are going to adopt for mainstream applications, it has to be cheap.”
However, Buterin also acknowledged that the current fees are one of Ethereum’s most pressing issues. “Ethereum today, the Layer 1, is not a system that is ready for direct mass adoption,” he explained, going on to highlight the need for Layer 2 scaling solutions such as rollups.
Several projects, such as Arbitrum by Offchain Labs and StarkWare’s StarkEx are aiming to make Ethereum more scalable on Layer 2. They promise to cut transaction costs by up to a factor of 200 through Optimistic Rollups and ZK-Rollups. While the technology behind these projects appears promising, implementation is still in its early stages.
Last month, Buterin published a 1,500-word blog post titled “Endgame,” in which he discussed a rough roadmap for achieving maximum decentralization of Ethereum. In the post, Buterin admitted that ZK-Rollups would take “years of refinement.”
Ethereum has been the subject of criticism for slow development times in the past. Updates like the upcoming merge to Proof-of-Stake have taken years to materialize, with Buterin recently admitting that his estimation that Ethereum could move away from Proof-of-Work by 2016 “were very wrong and worth laughing at.” Ethereum’s scaling woes and the high costs of using the network are part of what helped so-called “alternative Layer 1s” like Solana, Terra, and Avalanche thrive in 2021.
While Buterin has acknowledged the various challenges Ethereum faces, ZK-Rollup developers such as StarkWare appear to be more optimistic about how quickly their solutions will be viable. In StarkWare’s current roadmap, the company plans to have a fully-functional, interoperable ZK-Rollup-based Layer 2 solution ready for use in 2022. This new product, called StarkNet, is currently in open alpha, meaning developers can already start building applications directly on the network.
The next big event in Ethereum’s roadmap is its transition to Proof-of-Stake. The update is planned to take place in the first half of 2022 and will drastically improve Ethereum’s energy efficiency. However, it’s unlikely to reduce gas fees on Layer 1. Users will have to wait until the network implements blockchain sharding to see any real reduction in Layer 1 transaction costs.
Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies.
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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.
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“For better or worse, the amount paid to use Ethereum has skyrocketed in 2021. The total amount of ETH paid in fees has grown by over 10 times from $430M in Q4 2020 to $4.8B so far in Q4 2021. Such fees highlight the high demand and willingness to pay to use the Ethereum blockchain.”
IntoTheBlock acknowledged that high demand was driving the fees upwards, and despite this, users were still willing to pay to utilize the ETH network.
Users recently got a sigh of relief because Ethereum’s median fees dropped to $5.50 per transaction from highs of $34.18 last month.
The amount settled on the Ethereum has tripled
IntoTheBlock added that Ethereum showcased itself as an engine of economic activity based on high transaction volume.
“Ethereum becomes an engine of economic activity. The total volume processed just between ETH and stablecoins has been consistently high in 2021. The total amount of value settled on Ethereum has tripled relative to Q4 2020, and increased five-fold versus Q4 2017.”
This correlates with the fact that more money has flowed into the Ethereum network compared to Bitcoin. A couple of use cases have boosted this, like ETH’s backbone of the booming decentralized finance (DeFi) and non-fungible tokens (NFTs) sectors.
Furthermore, Ethereum recently showed better performance in annual returns than Bitcoin, with a 663% gain.
Therefore, the debate about Bitcoin versus Ethereum seems not to be going away anytime soon because ARK Invest CEO Cathie Wood recently stated that ETH was still undervalued than BTC.
Despite making significant strides in 2021, high gas fees in the Ethereum (ETH) network have been a big headache.
Nevertheless, users have a sigh of relief because Ethereum’s median fees have dropped to $5.50 per transaction from highs of $34.18 last month. On-chain metrics provider Santiment confirmed:
“Ethereum’s median fees have quietly come back down to an affordable $5.50 per transaction. This is a far cry from the $34.18 per transaction level that the ETH network was demanding near its AllTimeHigh just one month ago.”
This drop-in fee has been advantageous in pushing Ethereum’s utility levels based on high address activity. Santiment added:
“With ETH fees coming back to earth rapidly with this December price correction, address activity has soared to 7-month high levels. Utility of Ethereum is far more appealing to traders with fees back down to $5.50 per transaction.”
Ethereum has made notable steps this year, given that more money has flowed into its network compared to Bitcoin. This has been boosted by a couple of use cases like ETH being the backbone of the booming decentralized finance (DeFi) and non-fungible tokens (NFTs) sectors.
Furthermore, Ethereum recently showed better performance in annual returns than Bitcoin, with a 663% gain.
“The total value in the ETH 2.0 Deposit Contract just reached an ATH of 8,599,010 ETH.”
Ethereum 2.0, also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that sought to transit the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) framework.
The POS algorithm allows the confirmation of blocks to be more energy-efficient and requires validators to stake Ether instead of solving a cryptographic puzzle. As a result, it is touted to be more environmentally friendly and cost-effective. ETH 2.0 is also expected to improve scalability through sharding.
