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Ethereum 2.0

Here comes Ethereum 2.0’s first major testnet- Kintsugi

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Ethereum 2.0 may not be fully operational as of now, however, with the launch of its first major public net Kintsugi, users can get an idea of the network’s functionality. Tim Beiko, an Ethereum developer, first broke the news for the testnet release on the network’s Foundation blog. The latest launch is seen as the final step towards the blockchain’s transition from Proof-of-Work [POW] to Proof-of-Stake [POS] consensus algorithm that is scheduled to take place by the first half of 2022.

As for the name, Kintsugi is a Japanese art of repairing broken objects without attempting to hide the damage, on a philosophical level it emphasizes being transparent about something’s history.

Earlier in 2020, Phase 0 of the upgrade went live with the launch of the Beacon Chain, which would facilitate the bridge of the current network to the new one. In addition to that, billions of dollars in ETH have already been staked to the new network. To prepare for the merge, developers have created four temporary testnets designed to mimic the mainnet once it transitions to the proof of stake protocol. Further, in the blog Tim Beiko stated,

“The Kintsugi testnet provides the community an opportunity to experiment with post-merge Ethereum and begin to identify any issues. Once feedback has been incorporated into the client software and the specifications, a final series of testnets will be launched. In parallel, testing efforts will continue ramping up. After this, existing long-lived testnets will run through The Merge. Once these have upgraded and are stable, next up is Ethereum mainnet’s transition to proof of stake”

Interestingly, the news of the announcement for the testnet going live appears to have been previously posted back on Thursday, Dec. 16. Nevertheless, ETH Developers have made much progress towards the highly anticipated ETH 2.0 merge.

Ethereum 2.0 Merge in First Half of 2022

As mentioned earlier, the merge is slated to commence between the first six months of 2022. Following that, Ethereum 2.0 will move toward “Phase 2.” This will introduce Sharding, a scalability feature that is aimed at improving fees and transaction times and is expected to arrive in late 2022. As per a November report from ConsenSys over 8.4 million ETH has been staked on Ethereum 2.0’s beacon chain.

Ethereum founder Vitalik Buterin unveils the Roadmap for ETH 2.0

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Ethereum’s co-founder Vitalik Buterin shared his vision on the future of ETH 2.0 and provided a detailed roadmap on how to revamp the platform by making it acceptably trustless and censorship-resistant. Revealing more on the blog post dubbed Endgame, Buterin offered his insight on the plausible strategy of transforming a big blockchain that is denoted by its high block frequency, equally high block size, and thousands of transactions per second, into highly decentralized in terms of block validation and preventing the block operators from censoring.

Even though Buterin’s blog does not explicitly deal with the issue of centralization of block production, it still provides a work plan for its implementation. At first, the founder writes about a second-tier staking solution, which requires fewer resources to execute distributed block validation. On the security aspect, Buterin suggested the implementation of fraud proofs or ZK-SNARKs to enable users to check the validity of the block directly and in turn, save cost. In addition to that, he mentions introducing data availability sampling to led ‘users check block availability and add secondary transaction channels to prevent censorship’.

Ethereum’s Rollup-focused roadmap

With respect to the block production remaining centralized, Buterin opined that it would still persist even after the implementation of Rollups. For the uninitiated, rollups are basically layer-two protocols that execute transactions outside of the main chain of Ethereum.

According to Buterin, decentralization may not be long lasting due to the possibility of cross-domain Maximal [formerly Miner] extractable revenue [MEV]. As the name suggest MEV refers to the maximum amount of value that can be earned by the miners from creating block apart from the standard block rewards and gas fees. Explaining in detail, the founder noted,

There’s a high chance that block production will end up centralized: either the network effects within rollups or the network effects of cross-domain MEV push us in that direction in their own different ways. But what we can do is use protocol-level techniques such as committee validation, data availability sampling and bypass channels to regulate this market, ensuring that the winners cannot abuse their power.

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Summing up, the Ethereum co-founder said that the advantage of this rollup-centric roadmap is ‘open to all futures, and does not have to commit to an opinion about which one will necessarily win.’

What are Ethereum [ETH]’s investors anticipating?

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It’s been a mixed week for the overall crypto market. Ethereum [ETH], for one, registered a near 3% dip in a span of 24 hours, struggling to breach the $5k mark. The world’s second-largest crypto-asset witnessed a price pullback following the Security and Exchange Commission [SEC]’s decision to reject a spot Bitcoin Exchange Traded Fund [ETF] yesterday.

However, Santiment observed that Ethereum’s supply on exchanges declined by 15.66%, suggesting a lesser chance of sell-off and increased prospects of an upward price movement. The on-chain platform compared the data a year ago and found that the metric stood at 23.29% then, indicating investors are not keen to indulge in a selling spree despite its ongoing price consolidation, further fuelling hope for bullish price action. Commenting on the same, Santimnent noted,

Ethereum’s supply on exchanges sits at 15.66%. One year ago, this number sat at 23.29%. It’s clear that more and more ETH is moving safely to cold wallets for DeFi-related activity and holding, an encouraging sign for long-term price prospects.

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Interestingly a few days ago, the price of the leading altcoin was nearing close to its all-time high. Tronweekly had reported the possibility of a supply squeeze condition that was driving the price factor upward. This was due to the staking contract hitting more than 8 million ETH and another 8 million tokens locked across the DeFi protocols.

But high transaction fees continued to plague the overall network driving users and enterprises to opt for other cost-effective options. However, that did not deter ETH advocates from believing that the token is poised for a brighter future and even has the ability to challenge the dominance of the current largest cryptocurrency, Bitcoin [BTC]. One of them is Kenneth Griffin.

Ethereum vs Bitcoin

CEO of the US hedge fund firm, Citadel, Kenneth Griffin recently spoke on the future of the cryptocurrency and predicted that Ethereum will soon replace the king coin’s overall dominance in the digital asset market. Moreover, other speculators are of the opinion that the leading altcoin will rise higher due to its varied use cases and the proposed transition to Proof-of-Stake protocol that will significantly bring down the transaction fees as well as the time.

Ethereum [ETH] see a double-digit price drop as market bleeds red

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As the week came to a close, the entire cryptocurrency market faced the wrath of the bear. Most tokens witnessed their price supports take a hit with many investors seeing it as an opportunity to “buy the dip”. Up until last week, altcoins were performing better than Bitcoin but it looks like the world’s largest altcoin was doing a better job fending the bear now.

On Friday, Ethereum took a hit with a daily drop of over 7 percent. This red bleed leaked into the weekly rate as the loss percentage shot up to 17 percent. At the time of writing, ETH was trading for $2855.92 while holding a market cap of $336.84 billion. The latest bear crash took a massive chunk out of the daily trading volume, clocking in at $19.2 billion.

Ethereum’s crash was also accompanied by a lot of people moving into DeFi investments. New investments were still coming in from supporters and crypto organizations.

Ethereum 1 hour:

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Ethereum [ETH] see a double-digit price drop as market bleeds red 5

The largest altcoin had its work cut out as the last red candle shattered immediate price supports. After the day’s price crunch, the new support was formed at $2872.

Relative Strength Index: The RSI fell below the oversold threshold just as the bear broke Ethereum’s price support. Massive sell offs are a part of major price crunches as displayed in the Ethereum ecosystem.

Chaikin Money Flow: Ethereum’s CMF followed the RSI’s footsteps by crashing abruptly. The fall below the zero line signified that the capital leaving the market had overtaken the influx.

Parabolic SAR: All the markers for the day stayed above the price candles as the last candle dropped an entire level.

Ethereum 1 day:

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Ethereum [ETH] see a double-digit price drop as market bleeds red 6

In the long term, Ethereum’s recent crash paled in comparison to earlier drops. The support on the daily spectrum held near the $1700 mark, a marker created in July.

Chaikin Money Flow: Ethereum broke its bullish pattern by crashing below the zero line. Daily trading investments have decreased significantly since climbing to good heights in mid-August.

Parabolic SAR: The markers stayed above for the entirety of September with the latest crash contributing to the momentum shift. A price increase would enable the cryptocurrency to move into greener pastures.

Relative Strength Index: The sudden change in investor sentiment was on full show with the k-curve. The number of users selling their ETH tokens had surpassed the number of HODLers.

Ethereum [ETH] whale addresses skyrocket to 51-month peak

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Ethereum [ETH] has managed to reverse some losses after the flash crash of September 7. It was now up by almost 5% over the past day. The renewed interest in the crypto-asset can be attributed to the whales accumulating in the backdrop of a massive plunge.

As a matter of fact, the on-chain data provider Santiment observed that the ten largest ETH whale addresses have skyrocketed in supply held in the period of the last 15 weeks. Collectively, these addresses now hold more than 21% of the crypto-asset’s total circulating supply. With this, the amount of ETH stored in these cold wallets has increased to a 51-month all-time high.

Santiment’s tweet regarding the same read,

“Ethereum is charging back, making a modest rebound thus far to $3,537. The top 10 largest whale addresses have notably skyrocketed in supply held over the past 15 weeks, now owning 21.38% of all ETH, the largest amount by them in 51 months.”

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Ethereum [ETH] whale addresses skyrocket to 51-month peak 8

Bullish on Ethereum

Ethereum’s failure to advance and hold its fort above $4,000 may have drawn aggressive profit-booking from the short-term traders. But the latest accumulation trend depicted a positive picture for the altcoin that shed double-digit losses during the heightened sell-off earlier this week.

Many attempted to capitalize on the market-wide oversold bounce. With ETH’s rising dominance, investors are now betting on the largest altcoin as medium-term price movement does not look promising but rather bleak for Bitcoin.

Market participants aren’t the only ones who are bullish on Etheruem. Standard Chartered’s global research team compared the crypto-asset to a “financial market,” enabling lending, insurance, and exchanges and stated,

“In other words, while potential returns may be greater for ethereum than for bitcoin, risks are also higher,” said the bank’s team, adding “the current price reflects both the relative complexity of ethereum [versus bitcoin] and the uncertainty around ethereum’s development.”

The popular bank also expects Ethereum to profit from the 2.0 upgrade that started last year and is designed to enhance scalability, improve functionality make it more efficient.

Besides, Ethereum whales had reportedly moved over $1 billion in ETH across 21 separate transactions this week alone as the entire market severe correction. As revealed by the crypto tracker Whale Alert, an unknown wallet sent cryptocurrency exchange Binance a massive 99,990 ETH on September 7, which totalled more than $343 million, the largest of the tracked transactions.

Developer of ethereum layer 2 solution arbitrum secures $120M funds

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Offchain Labs, the developer of Ethereum scaling solution Arbitrum, has announced raising $120 million in a Series B funding round. It was led by Lightspeed Venture Partners and also saw the participation of Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital, among others.

Of late, the rollup network called Arbitrum One has garnered significant traction and has managed to build up notable support since it beta-launched to developers in May this year. Since then, approximately 400 teams have reportedly signed up for access.

Ethereum’s perennial inefficiencies and the rise of other scaling solutions

Besides, Ethereum’s scalability problems and network congestion have been topics of extensive debate and discussion. Enormous transaction times and fees have continued to burden developers despite the fact that markets surrounding the ecosystem have surged over the past year.

As a matter of fact, the core developers of the Ethereum ecosystem have attempted to solve these problems with upgrades to the protocol itself, in the short term, however, there seems to be no easy way out. Hence, it is only natural that the second layer solutions are being explored.

Needless to say, Arbitrum has emerged as a promising solution with the capability to handle more transactions than Ethereum at lower costs. It processes transactions on a sidechain that leverages optimistic rollups tech and then regularly conducts them to the main Ethereum blockchain in batches.

Arbitrum’s Mainnet beta

Until now, only developers could release and test their applications on Arbitrum’s platform. But the mainnet launch has now enabled the community members to interact with decentralized apps [DApps] on it. The official announcement read,

“We’ve committed to a fair launch, and today we’re delivering on that commitment by opening up to users for all projects simultaneously. But even though we’re removing the whitelist today, this doesn’t mean that every project will choose to go live immediately. The Arbitrum One Portal is the best place to track the progress of current and upcoming launches on Arbitrum.”

Arbitrum happens to be the first scaling solution by Offchain Labs, and the initiative is working on other solutions to scale Ethereum. Even as the release is a notable milestone, Arbitrum One is still in beta. The team behind the project asserted that they would be closely observing the rollout and “maintaining the ability to do fast upgrades and even pause the system should it become necessary.”

Ethereum Foundation receives $1.5M donation to fund Ethereum 2.0

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Ethereum Foundation has revealed that six crypto-companies have donated $250k each. According to the official announcement, the funds secured will be used to aid efforts to upgrade the Ethereum blockchain. Over the past several years, the ETH ecosystem has witnessed unprecedented developments and innovations.

To foster the growth of the blockchain, several platforms have come together and donated a total of $1.5 million. Announcing the same, Ethereum Foundation stated,

“Today, we’re excited to announce that Compound Grants, Kraken, Lido, Synthetix, The Graph and Uniswap Grants are donating $250K each to support ETH execution-layer client teams. This project is the result of several months of work, and will supplement the significant funding provided by the Ethereum Foundation this year. This fundraise will have no impact on the EFs continued financial support for these teams.”

Recipients of Ethereum Foundation’s fund

The official blog post also stated that the Ethereum Foundation has allocated more than $10 million on execution-layer client R&D since the beginning of 2019 and that it remains on its highest priority list.

The foundation reportedly picked five of its client teams- Besu, Erigon, Geth, Nethermind, and Nimbus to receive the funds. It will offer the necessary infrastructure for the network after the unification of ETH 1.0 and ETH 2.0. The non-profit organization asserted to the community that the additional grants will not influence its current financial support efforts.

Besides, TWJ had earlier reported Kraken’s contribution to the Ethereum Foundation to support the open-source developer teams behind ETH 2.0. In addition to the cryptocurrency exchange, the six entities include Uniswap, Synthetix, The Graph, Compound Grants Program, and lastly, Lido Finance.

Revealing the main intention behind this approach, the foundation said,

“Part of our goal with this first round is to lessen risks that come from reliance on any single team or entity as we all work to maintain quality open source products in a diverse, decentralized, and sustainable way. We continue to work towards more decentralized funding mechanisms for Ethereum’s public goods, and this is one more step that enables larger groups of participants to directly support client development and maintenance.”

Kraken gives $250,000 for Ethereum 2.0 development

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Leading cryptocurrency exchange Kraken has announced donating $250,000 to the Ethereum Foundation in a bid to support the open-source developer teams behind Ethereum 2.0. According to the official press release, the fund will be granted to developers working on nodes that maintain the network software over the following months. The exchange further mentioned that the funds would be directed to projects that drive over 80% of the distributed Ethereum network.

Kraken’s announcements come just a few weeks after Ethereum underwent a successful London hard fork which saw the blockchain network introduce five highly-awaited upgrades to its software.

Following the development, Kraken CEO and co-founder Jesse Powell stated,

“As the first major exchange to list ETH for trading, Kraken is proud once again to lead the way by giving back to the courageous builders who are hard at work on the front lines of crypto innovation.”

Kraken’s grants for Ethereum ecosystem’s development

The cryptocurrency exchange clients have reportedly staked more than 800,000 ETH, worth more than $2 billion, to secure the Beacon Chain, which happens to be the PoS version of the ETH blockchain. As a result, they have already made over 25,000 Ether in rewards via this offering by the end of July.

Besides, this is not the first time Kraken has been involved in the donation for the ETH ecosystem. As a matter of the fact, the crypto platform had previously given out grants to the decentralized ETH funding platform Gitcoin, which assisted Kraken to allocate $150,000 to the blockchain network’s infrastructure projects. Additionally, some of the other platforms to have received grants from the global exchange are Brink, BTCPay Server, and the University of Wyoming.

Ethereum Foundation Executive Director Aya Miyaguchi lauded the “collaborative efforts” and stated,

“We strongly believe that collaborative efforts and support are the most sustainable way to benefit Ethereum in the long-term. This joint effort to support teams and builders that maintain a diverse set of Ethereum clients is not only impactful, but sets a great example.”

Ethereum [ETH] has little resistance until $3,390

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Ethereum [ETH] price surged to a whopping $3,000 for the first time in almost 80 days on the 7th of August. It wasn’t until the short-term sellers flipped the bullish narrative. But the weekend uptrend appears to have extended as the asset erased the subsequent losses and climbed back to $3,119, at the time of writing. The pullback was temporary and it was up by more than 20% over the past week.

According to the latest charts by the popular data analytic platform IntoTheBlock [ITB], the world’s largest altcoin has little resistance now that its price jumped above $3k. However, its next prominent hurdle stands tall at $3.39k. Its tweet regarding the same read,

“Ethereum [ETH] broke the $2,900 resistance and the IOMAP reveals that it has little resistance until $3,390. On the support side, around $2,860, over $800k $ETH were bought. Failing to hold on that level, there are two even larger levels of support until $2,6k.”

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Several industry leaders have remained optimistic about ETH’s overall long-term prospects. As a matter of fact, many others have claimed that the digital asset is likely to reach a new all-time high by the year-end and even rally to $10,000 or more in the next 12 months. The prediction though bold does not appear to be far-fetched as Ethereum has been on the best-performing assets in the last two quarters. Its fundamentals have never looked more bullish especially in the days leading up to Ethereum’s long-awaited London hard fork.

Significant rotation out of Bitcoin to Ethereum

Ethereum has been the talk of the town long before the hyped upgrade went live on the network thus paving the way for a huge transition. This can be evidenced in the latest report by the digital asset firm, Genesis which revealed that a significant rotation out of Bitcoin into Ethereum.

As institutional interest remained intact, the firm’s new loan originations surged by approximately 700% YoY and hit a new peak of $25 billion in the second quarter of 2021, and were 60% higher quarter-over-quarter. The report noted that the cumulative originated value to be at $66 billion which, in fact, marks the thirteenth consecutive quarter of growth.

While Bitcoin trading accounted for roughly 47% of Genesis’s overall spot trading activity, Ethereum pulled out most of that share from Bitcoin. According to the firm’s estimates, ETH accounted for nearly 25% of overall volumes on the desk. This had a ripple effect as other Ethereum-based DeFi protocols gained steam with the outperformance of ETH over BTC in the first half of Q2. Similarly, trading in UNI, SUSHI, AAVE also picked up.

Here’s what Ethereum [ETH] whales are upto

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There’s no stopping the Ethereum whales. As the crypto market went on a winning bullish streak, big Ether holders jumped on to get some action. Data provided by the on-chain analytics aggregator, Santiment, revealed that Ethereum whales have continued to accumulate the asset on the cheap.

As a matter of fact, the 10 largest ETH wallet owners are now in possession of more than 20% of the overall token offering. Over the past couple of months, Ethereum saw a dramatic plunge from its historic peak of $4,362 established on the 12th of May this year. During this phase, the whales had sold off coins

The accumulation by the top 10 ETH whales renewed after subsequent crashes and dips. The data shows that these entities have purchased another 2% of the ETH supply over the past two months. Besides, the overall accumulation trend of the whales in question has remained unfazed since May 2017.

The tweet regarding the same read,

“Ethereum’s top 10 non-exchange whales are adding on to their holdings, as their 21.3 million, ETH held this week established a new 5-year high. Meanwhile, top 10 exchange whales recently hit a low of 4.66M $ETH, the lowest since ETH’s 2015 inauguration.”

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The latest trend by the ETH whales demonstrated great confidence in the world’s largest altcoin in the world as it continued to rake in the digital asset at a magnificent pace.

Ethereum reserves take a hit

Another bullish sign that has led up to this week’s price surge was the exchange reserves of Ethereum that plunged to a new low in a one-year period. Crypto exchanges have shed more than five million ETH, down from a whopping 26 million by June 2020 to 21 million by June 2021.

Currently, ETH whales as well as investors have gone on an accumulation spree in anticipation of a price appreciation. The London hard fork is a crucial milestone that these entities are eyeing now. Hence, this number is like to decline more and more in the coming days.