In today’s BeInCrypto video news show, Jessica Walker analyzes the dazzling rise of the world’s second-largest cryptocurrency by market capitalization, Ethereum (ETH).
The launch of Ether futures on the Chicago Mercantile Exchange (CME) caused widespread skepticism on ETH’s next direction. Some pundits believed it would spark another bull run. Others anticipated a replay of the market crash that followed the launch of Bitcoin (BTC) futures.
Two days after it debuted on the CME, lingering doubts were erased as the digital asset climbed a new all-time high. Its recent success is due to several important factors.
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The emergence of Decentralized Finance (DeFi) has created a myriad of opportunities for users in a frenzy similar to the ICO era. This makes sense since most DeFi projects are on the Ethereum blockchain.
The rising utility of stable coins like Tether (USDT) has also led to increased network activity. Despite these popular solutions, they have also come at a dire cost.
Soaring Gas Fees Heighten the Need for EIP-1559 Gas-Saving Upgrade
Ethereum gas fees are skyrocketing at an alarming rate, thanks in no small part to increased usage on Decentralized Exchanges (DEX). Statistics from monitoring resource, ycharts shows that the average transaction fee on the Ethereum network presently stands around $22 per transaction.
The Ethereum Improvement Proposal (EIP-1559) aims to address this growing gas fee problem. EIP-1559 is a proposal to replace the presently used auction-based system that favors miners to the detriment of transaction users. It provides a dynamically-adjusted method that will allow users to pay the lowest bid, dependent on network load and demand.
Ethereum 2.0 Staking Reaches New Milestone
Ethereum’s imminent transition to the Proof-of-Stake consensus is gathering great momentum. In November 2020, Etherscan data showed that over $510 million ($600 per ETH) had been deposited into the Ethereum 2.0 contract address. Today, the ETH price has tripled, and the amount of staked ether is worth around $5.4 billion.
Ethereum’s global node distribution also currently exceeds that of Bitcoin. There are an estimated 11,901 nodes on the Ethereum network and about 9,615 Bitcoin nodes. The current growth trajectory has undoubtedly increased anticipation for Ethereum’s highly touted “complex upgrade” dubbed Ethereum 2.0.
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