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Ethereum Heat Up in 2023, Average Gas Prices Soar Amid Rising On-Chain Activity: Report

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Analytex, an advanced analytics ecosystem for DeFi 2.0 and beyond, revealed that Ethereum, the second-largest cryptocurrency by market capitalization, has demonstrated growth in its on-chain activity, as per the February 8th report.

The data shows an increase in Ethereum’s average gas price, and a boost in smart contract usage, despite a decline in the average number of transactions and unique wallets.

The report found that the average gas price, calculated in gwei, increased by 29.27% in January 2023 compared to the previous year. This hike was attributed to a rise in user activity, which was reflected in the increase from 19.2 gwei to 24.82 gwei from December 2022 to January 2023. 

Meanwhile, the average number of unique active ETH wallets per day decreased by 10% to 387,475, the lowest in six months. On the other hand, the number of unique active smart contracts increased by 6.74%.

Ethereum’s Stake in DeFi Grows

Daily ETH transaction data showed a slight decrease of 0.8% from December to January. Nevertheless, the Ethereum block statistics indicated stability, with little to no change in the average number of blocks mined each day and an increase in the total block size per month. 

Analytex suggests that these contrasting data metrics signify an “increased interest of both current blockchain users and smart contract developers.”

Ethereum’s influence in the decentralized finance (DeFi) sector has also seen a significant rise, with a 26% increase in total value locked across different staking pools in January 2023, according to a report by DappRadar. 

The market hit $74.6 billion worth of staked assets, and Lido Finance dethroned Maker DAO as the largest DeFi protocol due to the popularity of its liquid staking derivative protocols. 

Ethereum’s upcoming Shanghai upgrade has also driven staking in DeFi, as it is expected to open withdrawals from ETH staking contracts.

Ethereum Shines with NFT Boost

Ethereum is also experiencing a surge in popularity, fueled by a rise in non-fungible tokens (NFT) due to the launch of a mini-game by Yuga Labs, according to a report by Bernstein. 

Daily fees on the Ethereum blockchain have skyrocketed, more than doubling since the start of the year to reach $4 million to $6 million, while ETH has gained a substantial 35% in value.

Despite negative ether inflation, analysts believe that both ETH and Bitcoin remain solid investments, with the next big catalyst for Ethereum being the Shanghai upgrade in mid-March. 

This event will allow for withdrawals of staked ether, though some caution may be warranted due to potential supply concerns from unstaked ether.

Related Reading | XRP Lawyer Files Amicus Brief To Support Ripple’s Other Lawsuit 

Ethereum Testnet Zhejiang Successfully Conducts Staked ETH Withdrawals: Report

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In a major step towards its transition to a fully-featured proof-of-stake network, the Ethereum test network (testnet) Zhejiang successfully conducted withdrawals of staked ether (ETH) for the first time. On Tuesday, at 15:00 UTC, the upgrade was triggered and finalized 13 minutes later at 15:13 UTC, according to the February 7 report.

The Dress Rehearsal for Ethereum’s Future

According to Barnabas Busa, a DevOps engineer at the Ethereum Foundation, the Zhejiang testnet was designed to give developers a practice run of the withdrawals that will happen on the main Ethereum blockchain post its highly-anticipated Shanghai upgrade, expected next month.

Busa said:

On the Zhejiang testnet, partial and full withdrawals, as well as BLS changes, are included in the execution payload. We have a successful fork.

With the BLS modifications, individuals now have the ability to modify their withdrawal credentials to efficiently handle staked Ether withdrawals. The testnet in Zhejiang is the first of three to run a simulation of the upgrade in Shanghai.

Testnets duplicate the main blockchain and provide developers and users with a low-stakes environment to test any code changes to their applications. The next testnet upgrade will take place in the coming weeks, moving to Sepolia and then Goerli.

Ethereum’s Path to a More Efficient Network

As per the report, Shanghai will be Ethereum’s first hard fork since the Merge in September, marking its transition to a proof-of-stake network. The move to proof-of-stake increased the energy efficiency of Ethereum compared to when it utilized the POW system used by the Bitcoin blockchain. 

With proof-of-stake, cryptocurrency is “staked” on the blockchain by depositing it, providing a more efficient method of transaction validation and security.

However, until the Shanghai upgrade is completed, the staking mechanism is one-way, allowing users to deposit ether but not withdraw it. The upgrade has become a highly-anticipated event in the cryptocurrency ecosystem, with traders paying close attention to how it might impact the market. 

Some believe it will encourage more staking, while others believe ETH may experience a price drop due to selling pressures when stakers rush to withdraw their funds.

Related Reading | Cardano’s IOHK Released Its First Ethereum Sidechain

Acala EVM+ Takes Polkadot DeFi To The Next Level with Ethereum-Compatible DApps

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Acala, the top project in the Polkadot ecosystem, has announced the mainnet launch of the Acala EVM+. This exciting development offers DApp developers the opportunity to launch Ethereum-compatible DApps on Acala’s DeFi app chain and the leading liquidity hub of Polkadot.

The Acala EVM+ provides a development environment that is analogous to Ethereum while giving users the full power, speed, and customization of the modular blockchain framework of Polkadot, Substrate. It means that any DApp team can now deploy their EVM-based smart contracts onto the Acala EVM+ with minimal changes while still using their familiar tooling.

Acala EVM+ A Game-Changer For Polkadot DeFi Ecosystem

The Acala engineering team spent several months custom-building the EVM to optimize for the potential and longevity of Substrate rather than simply replicating Ethereum on Polkadot. 

The result is an environment that combines the best of both worlds between the EVM and Substrate, hence the name EVM+.

For DeFi teams, the Acala EVM+ provides a seamless transition to Polkadot and access to expected billions in liquidity from DOT and DOT derivatives, as well as from other top ecosystems like Ethereum and Solana. 

However, EVM-compatible DApp platforms can expand their offerings and onboard hundreds of thousands of new Polkadot-native users.

At the same time, DApp teams can grant their existing EVM-based users access to new assets and markets within the same interface and experience, thanks to the new Acala market that connects to the Polkadot DeFi ecosystem.

Additionally, the Acala EVM+ is also customizable and composable, leveraging Substrate to provide developers with a fully Ethereum-compatible development environment that is integrated with all Acala-based DeFi DApps. 

It includes access to Acala’s core DeFi primitives like liquid DOT staking and the aUSD stablecoin, as well as chain-level customizations like automatic scheduling and “Bring your own gas.”

Acala’s app chain is trusted by institutions like Coinbase, Figment, Kraken, and Current.com, providing DApps with institutional liquidity and access to the worlds of Web2 and Web3.

Nevertheless, the Acala EVM+ is a game-changer for the network’s DeFi ecosystem, offering DApp developers the power and potential of Substrate while providing seamless access to Ethereum-compatible DApps. 

Related Reading | XRP Lawyer Files Amicus Brief To Support Ripple’s Other Lawsuit

Cardano’s IOHK Released Its First Ethereum Sidechain

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Cardano developing firm IOHK has launched its first Ethereum-compatible sidechain on the public net. Although this isn’t the first time, as Milkomeda’s Cardano sidechain, which is EVM-compatible, has been successfully running on the main network for some time now.

However, the recently released Ethereum-compatible sidechain was the first explicitly created by Input Output.

A sidechain is a separate blockchain that operates next to the main network, sometimes known as the parent blockchain. Sidechains frequently aim to provide scalability to the mainnet, which frequently places a premium on security and decentralization.

In the series of tweets, Input Output HK invited community members and stake pool operators on Cardano to link their wallets, test the network and interact with smart contracts and decentralized applications.

This proof of concept testnet is ephemeral and will be regularly respun during its pilot phase. Ultimately, it is intended to be a community resource and we encourage developers and SPOs to get involved and collaborate.

The information comes after a previous release by the Cardano ecosystem team, which disclosed the introduction of a software toolkit designed to enable developers to deploy unique sidechains on Cardano with the goal of enhancing the ecosystem.

The announcement also included the official technical documentation for the sidechain toolkit.

It was reported earlier that IOG developers had already utilized the toolkit to construct an Ethereum Virtual Machine [EVM]-compatible sidechain public testnet as a “proof-of-concept.”

The team was waiting for the audit to be finished, and once it is, anyone can run decentralized applications, make smart contracts, and transfer tokens between testing chains.

The toolkit will also provide the sidechains creators the ability to choose their own consensus mechanism in addition to other application-specific features.

“Cardano Sidechains Will Bolster Mass Adoption”

IOG hopes that in the near future, “a family of Cardano sidechains and partner chains will emerge,” paving the door for “wide adoption” of the Cardano ecosystem.

As reported by TronWeekly, deposits, and withdrawals on ADA are to be temporarily suspended by Binance for the upcoming Valentine’s Day update of the Cardano network, called SECP.

In accordance with the blog post, the exchange will reopen deposits and withdrawals for ADA once the upgraded network is stable.

The scheduled SECP update will initially take place on the test networks from Feb. 11, before going live on the mainnet.

Ethereum Web3 Resilience Boosted By Infura’s Decentralized Marketplace: Report

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Infura, the Ethereum blockchain suite of APIs and developer tools, is about to take the Web3 ecosystem to new heights with its latest project, according to the February 7th report.

A decentralized marketplace of data providers aimed at preventing app crashes is being developed by Infura and promises to guarantee decentralized blockchains for years to come.

Infura Researcher Patrick McCorry explains that the new project will not be a separate blockchain but rather a marketplace connecting consumers of blockchain data with providers. 

It will be one of the initial providers on the network, alongside up to nine other providers who will work together to bootstrap the network and eventually grow the marketplace.

A Reliability Project for Ethereum’s Web3 Ecosystem

In a recent interview, McCorry emphasized that the goal of the decentralized Infura is to guarantee reliability and prevent any single point of failure in the Web3 ecosystem. 

The new marketplace will allow users to quickly switch to a new provider in case of an outage, making the Web3 ecosystem more resilient.

Furthermore, the decentralized Infura marketplace has the potential to be more censorship-resistant than its current centralized version. Providers will be spread across different geographical areas and operate under various jurisdictions, reducing the likelihood of censorship.

Web3 app developers widely use Infura to pull data from blockchains, and it is relied upon by many centralized exchanges for tracking deposit and withdrawal transactions. 

However, Infura has come under scrutiny for its centralization, as evidenced by the November 2020 MetaMask wallet app outage and inaccuracies in transaction data from centralized exchanges.

By developing a decentralized marketplace of data providers, Infura’s goal is to address these concerns and ensure the continued decentralization of blockchains. 

However, Infura and potential partners will discuss the project’s next steps at Ethereum Denver in late February or early March.

Nevertheless, its decentralized marketplace of data providers promises to boost the resilience of Ethereum’s Web3 ecosystem and prevent future Web3 app crashes. 

By spreading providers across different geographical locations and jurisdictions, the new project also has the potential to be more censorship-resistant.

Related Reading |  North Korea Breaks All Records For Crypto Thefts Of 2022 

Ethereum Gas Spenders Scam Alert: Report

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The top two gas consumers on the Ethereum network, according to the most recent data from blockchain security company PeckShield, are zero-transfer con artists. To access the victims’ wallets, scammers utilize bogus wallet addresses to coerce users into sending money to these addresses.

It is well known that Ethereum Virtual Machine (EVM) chains are the primary target of zero-transfer scammers. Fraudsters construct fictitious wallet addresses that mirror the genuine addresses of their potential victims. Using a smart contract and the “TransferFrom” feature, they transfer 0 tokens from any wallet. They can deceive unwitting victims in this way by fabricating a phony wallet history with zero transfers.

Users who don’t do their homework can utilize the scammer’s address, putting their money at risk because their wallets are probably compromised. According to PeckShield, scammers who make these zero-token transactions are the biggest spenders on Ethereum.

Users must exercise extreme caution when making blockchain transfers, particularly on the Ethereum network. Before transmitting any money, users should always verify the legitimacy of the wallet addresses they are utilizing. Users can secure their money and stay safe from zero-transfer scams by taking these precautions.

Ethereum, Platform For Stablecoin Testing

In other news, Visa is reportedly testing the use of the stablecoin USDC to accept payments and make payouts on Ethereum. The transactions were “big value settlement payments,” according to Cuy Sheffield, Vice President and Head of Crypto at Visa.

He supposedly stated,

“That’s been one of the areas where we want to build muscle memory. The same way that we can convert between dollars in euros on a cross-border transaction, we should be able to convert between digital tokenized dollars and traditional dollars.”

A group of researchers and engineers from Visa have also been analyzing the theoretical underpinnings of several blockchains. Security, scalability, interoperability, privacy, and use cases for various protocols are among the topics of focus.

The business began looking at possibilities for enabling auto payments through Ethereum wallets a few months ago. The industry leader in credit cards published a proposal explaining how customers may set up automated payments in the second part of December 2022. Users were able to take banks and other centralized organizations out of the equation.

Ethereum-Focused Scaling Firm Teams Up With Chainlink

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Ethereum-focused scaling platform StarkWare has joined hands with leading blockchain oracle network Chainlink to onboard the latter’s price feeds into the StarkNet ecosystem.

Chainlink is a decentralized oracle network that enables smart contracts to securely interact with real-world data and events, making it possible for them to be triggered by data from external sources.

Through the partnership, StarkWare will be able to participate in Chainlink’s Scale program. In addition, certain Chainlink oracle node operation expenses will be covered by StarkNet tokens, providing Starket developers with access to Chainlink oracle services and data feeds.

Last year, StarkWare secured an $8 billion valuation and announced plans to open source its core cryptographic software tool.

The Israel-based tech firm oversees the scalability issues of Ethereum, which cause slow throughput and high gas or transaction fees.

The company has two platforms: the StarkEx scaling engine and StarkNet, which empowers developers to build decentralized applications [dapps]. In a meeting, the ETH-based scaling firm revealed its plans to open-source the STARK Prover technology.

The announcement was made during the two-day StarkWare Sessions 2023 event in Tel Aviv, Israel. The company said the plan to open source will take time to implement, but StarkWare is committed to making the entire tech stack transparent for developers.

StarkWare co-founder and President Eli Ben-Sasson said in a statement at the summit.

Every step we take to provide infrastructure and to make it accessible and decentralized is a catalyst for devs to build. And the quicker and more broadly they build, the faster we’ll see mass onboarding to solutions that truly enable people to manage their own funds. So there’s a direct line between open-sourcing key tech and popularizing self-custody.

As reported by TronWeekly, Ethereum for the first time since Sept. 12, climbed above $1700 briefly. The second biggest crypto by market cap began 2023 on an impressive note, with a 40% rise to date.

Ethereum Rally Might Stall; Here’s Why

Following the FTX saga and the prolonged bear market of 2022, the leading altcoin has been able to recoup the losses suffered during the events in just a span of 30 days.

Also, in February, ETH experienced the highest percentage of profitable transactions in the previous two years.

Investors are unsure whether the price rally would continue its momentum even as profit-taking has increased, Santiment noted.

On the brighter side of things, an Ethereum developer announced the launch of “Zhejiang” public testnet on February 1 which provides a test environment to run withdrawals of staked Ether.

Visa Eyeing Ethereum For ‘Muscle Memory’ Settlement Plans: Report

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Visa has revealed its plans to allow customers to convert digital assets to fiat currencies on its platform. the company is testing the acceptance of USDC settlement payments on Ethereum. The goal is to develop “muscle memory” for settlements and handle large value payments in USDC on the Ethereum platform.

The news was delivered by Cuy Sheffield, head of Visa’s crypto division, at the recent StarkWare Sessions 2023 in Tel Aviv. According to Sheffield, global settlement with digital assets and fiat currencies is one of the key areas in which Visa invests.

The payment giant is working to incorporate blockchain technology into its existing network to facilitate faster transactions. However, settlements currently still take place on the SWIFT system, which has limitations that prevent money from being moved as frequently as desired.

To overcome these limitations, Visa has been testing the acceptance of settlement payments with stablecoins, such as USDC. Sheffield confirmed that the company sees huge potential in the blockchain and digital asset space and is looking to take advantage of its value on existing bank rails and rebuild it on top of blockchain rails using stablecoins.

Visa’s Interest in Ethereum And Stablecoins

Former CEO Al Kelly has also shared the company’s plans for central bank digital currencies (CBDCs) and private stablecoins, stating that they “have the potential to play a meaningful role in the payments space.” 

Sheffield confirmed the company’s positive outlook on blockchain technology and digital assets, noting that they are exploring ways to take the value that Visa provides on existing bank rails and rebuild it on top of blockchain rails using stablecoins.

Sheffield said:

We’re thinking a lot about how to take some of the value that Visa provides on existing bank rails, with existing forms of beyond in a rebuild that on top of blockchain rails, using stableboards. If we think there are huge opportunities in that area, it just kind of stays on emerging.

Nevertheless, Visa’s plans to allow for the conversion of digital assets to fiat currencies on its platform is a significant step forward in the company’s efforts to build “muscle memory” around settlements, particularly with regard to Ethereum and stablecoins. 

This move highlights the growing interest and adoption of cryptocurrencies and blockchain technology in the traditional finance sector.

Related Reading | Weekly Market Watch: Bitcoin & Ethereum’s Battle Of Bulls And Bears, Low Cap Tokens Experience Growth

Weekly Market Watch: Bitcoin & Ethereum’s Battle Of Bulls And Bears, Low Cap Tokens Experience Growth

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Crypto markets saw a mixed performance last week as bulls and bears engaged in a tug-of-war. Bears attempted to bring down both Bitcoin and Ethereum. Additionally, despite some alternative coins showing substantial growth at the beginning of the week, the upward trend was eventually overturned by the close of the week.

Several tokens on the list of weekly gainers have shown substantial growth, with SingularityNET (AGIX) leading the pack, followed by Render Token (RNDR) and dYdX (DYDX) in third place. Other tokens have also experienced significant gains.

SingularityNET (AGIX), a decentralized AI platform utilizing both Ethereum (ETH) and Cardano (ADA) smart contract blockchains, has recently garnered attention in the crypto sphere. Its native token, AGIX, is currently experiencing a bull run and has been named one of the most bullish tokens in the market. 

AGIX 7D graph coinmarketcap
Source: CoinMarketcap

As of Monday, AGIX is trading at $0.4211, experiencing a 27% increase in the past 24 hours and a whopping 131.15% surge in the last week. The token hit its peak at $0.4579 this week and closed the week at $0.447 after starting at $0.1697, making for a strong and impressive performance.

While AGIX’s recent surge may be exciting for investors and traders, some market analysts warn that the token’s current rally is not sustainable. The support level at $0.40 is considered shaky, and a potential break below this mark could result in a dip to $0.35 in the coming months. 

Despite these concerns, AGIX’s impressive performance has drawn the attention of the investment community, who are keeping a close watch on the young network as it continues to gain traction in the crypto market.

Another low market cap token also emerged as a weekly gainer; Render Token (RNDR) saw a significant price increase, with a weekly gain of 46.73% and a current trading price of $1.82. 

RNDR 7D graph coinmarketcap
Source: CoinMarketcap

The surge in price is attributed to the launch of the Render Network Foundation, a non-profit dedicated to maintaining the Render Network protocol, and the adoption of a new tokenomics model called burn-and-mint equilibrium. The new tokenomics model received 100% support from the project’s DAO, which appears to have encouraged market participants to accumulate RNDR.

The DYDX token, an Ethereum-based token, has experienced a recent surge in value, with a 3.06% rise in the last 24 hours and a 31% increase in the past week. The rise is due to the actions of a mysterious whale who has accumulated a large amount of DYDX tokens worth $21.4 million. The whale, who has not been identified, received 9.5 million DYDX from Binance since October 18th, 2022, as reported by TronWeekly, 

DYDX 7D graph coinmarketcap
Source: CoinMarketcap

Moreover, some popular coins are experiencing gains in weekly charts, including Shiba Inu (SHIB) with 22%, The Graph (GRT) with 37%, and ImmutableX, with an increase of 28%, according to the data from CoinMarketcap. 

Bitcoin (BTC) & Ethereum (ETH) Weekly Review

January brought a stunning rally for both Bitcoin (BTC) and Ethereum, but now it seems the two are taking a break in February, which is a positive sign as vertical rallies are not often sustainable. A slight decrease could eliminate uncertainty among long-term holders, offering an opportunity for them to expand their portfolios.

Bitcoin saw a brief period of glory when it reached a record high of $24,255 on February 2nd, but a drop followed as short-term traders took profits. However, Bitcoin is near a solid support range of $22,800 to $22,300.

BTCUSDT 2023 02 05 23 56 45
Source: Tradingview

Ethereum also saw a significant surge in value over the week, beginning at $1,567.42 and reaching a peak of $1,704.46. ETH has been trading close to the $1,680 resistance level for the past few days, and a tight consolidation near an overhead resistance typically leads to an upward trend.

ETHUSDT 2023 02 05 23 57 57
Source: Tradingview

However, CoinMarketCap data shows that the current trading price for Bitcoin is $22,839.27, with a 2.37% decrease in the past 24 hours and a 3.37% drop over the past seven days. Meanwhile, Ethereum is being traded at $1,630.20, experiencing a 2.23% drop in the past 24 hours and a slight 0.25% increase over the past seven days.

Ethereum Breaks Above $1700 But There’s A Catch

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For the first time since Sept. 12, Ethereum surged above $1700 before recoiling back to $1640, at press time. The second biggest crypto by market cap kickstarted 2023 on an impressive note, with a 40% rise to date.

Following the FTX saga and the prolonged bear market of 2022, the leading altcoin has been able to recoup the losses suffered during the events in just a span of 30 days.

Also, since the beginning of February, ETH has experienced the highest percentage of profitable transactions in the previous two years.

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Ethereum Breaks Above $1700 But There's A Catch 7

Investors are unsure whether the price rally would continue its momentum even as profit-taking has increased, Santiment noted.

For one, Ethereum repeatedly failed to overcome the $1,680 resistance and the accompanying negative news circulation might bear the ability to destroy the bullish triangle pattern.

Investors are opting for defensive positioning ahead of the upcoming Shanghai upgrade.

Ethereum’s highly anticipated hard fork, which is expected to launch in March, will allow the withdrawals of over 17 million ETH staked or deposited in the Beacon Chain since Dec 2020.

Only 43,200 ETH can be unstaked each day, even though the 17.26 million total staking amount cannot be removed on the day of the update.

Ethereum’s Shanghai Fork Might Trigger Sell-Offs

However, the total staking reward of the past two years, which amounts to roughly 1 million ETH, can be withdrawn instantly.

Since the entire stack is now withdrawable, holders may rush to exchanges to sell their ETH as soon as the floodgates open, potentially driving down the price. This has raised concerns among traders.

On the positive side of things, a developer for the Ethereum Foundation announced the launch of “Zhejiang” public testnet on February 1.

In order to help validators prepare for the Shanghai hard fork, the implementation will permit staked Ether withdrawal in a test environment.

Additionally. it would replace the Shandong testnet because when the latter was launched, it included several EIPs that will not be rolled out with the upgrade.

The Zhejiang testnet, in the opinion of one ETH developer named Paritosh, is a good opportunity for all users to test out how they intend to gather, present, and use the withdrawal information.