Ethereum 2.0

Is Ethereum’s [ETH] Sell-side Pressure Diminishing?

June 2, 2021 by Chayanika Deka

Ethereum [ETH] has been beating the market on many fronts. The cryptocurrencies appeared to be recovering after the May setback. The investor sentiment was still in the bearish territory but there could be a reversal in this trend in the near term.

According to the recent on-chain analysis, the world’s largest altcoin’s sell-side pressure was found to be diminishing more and more which provided a window hope for Ethereum’s price movement.

What does Ethereum on-chain metrics depict?

After weeks of failed attempts to reclaim the psychological level of $3k, Ethereum might finally see a respite. This was according to the crypto intelligence platform, Santiment. The cryptocurrency saw a massive panic selling on the 28th of May spike, at the bottom.

This was when the investors went on to accrue significant profit when the price was near $2.6K. However, there has been a change in this trend. While exchange deposits still remain high when compared to the entire six months period, but less and less Ethereum was moving to these platforms. This demonstrated a sentiment of holding among the market participants.

In addition, the ETH active addresses were also growing which was a sign of more activity in the coin market that could potentially catapult its price back to the recently established highs. In fact, Santiment also revealed that the figures were much stronger than Bitcoin.

“It’s not looking bad. At least from the perspective of social data and on-chain data. Rebounded quite viscerally in the last 10 days. Much stronger than Bitcoin. And it continues to grow, which is good for ETH.”

On the other hand, the fee on the Ethereum network was hovering close to its lowest ever level this year which was another good sign for the market. This can be attributed to the migration of many users to Polygon as well as fewer users were swapping stuff on mainnet.

While there are some encouraging signs in the short-term, the 36-day MVRV is yet to dip into negative at all. Meaning the profit-taking phase by the long-term holders is not yet over. On the flip side, upon gauging this bull cycle, the chances are fairly low, in fact, lowest since November 2020.

According to Santiment, a profit-taking phase could, at the very least facilitate more price appreciation, even compared to the previous rally.

Ethereum Dev Posts Clarification After Prysm Mainnet Block Proposal Failures

April 29, 2021 by Chayanika Deka

Ethereum 2.0 core developer, Raul Jordon explained the reasons why the beacon chain started missing a lot of block proposals. He revealed that Prysm represented a large portion of Ethereum 2.0 operators and hence, naturally became the likely suspect.

This was the first major incident on Ethereum 2.0. So what exactly happened? Prysm validators failed to produce blocks for a period of 18 epochs on Friday, 23rd of April. The very next day, the validators reported the same issue again and again this time for 18 epochs. This issue prompted a reduction in validator participation.

Jordon admitted to being able to reproduce the error locally and said that the problem demonstrated an already known issue regarding ETH 1.0 data voting and validator deposits. This is the first time, that the issue had been reported to the team since it had never been widespread in any testnet nor in mainnet.

The bug was reportedly extremely tricky to diagnose, and it took the team of developers a period of 30 hours before getting to a root cause.

Impact on Ethereum 2.0

According to the developer, this event should not reduce the confidence in Ethereum 2.0. He explained that there was no consensus failure, and the impact and scope of the incident were small at the scale of the current 2.0 mainnet. Acknowledging the robustness of the ecosystem, Jordon stated,

“.. [ETH2.0].. with very high validator participation numbers since genesis, and has never skipped finality for any epoch. The ability for the network to go back to perfect operation after incident resolution instead increases confidence in the resilience of the blockchain, from our perspective.”

According to the post-mortem report, the total loss incurred from the incident is estimated to be roughly 25 ETH. All clients of the ecosystem were reportedly subjected to missed attestation penalties and the average per-validator loss was nearly 205K gwei [around $0.50 in the current market price of the crypto-asset].

In addition, the operational impact of the failure in block proposals is estimated to have surpassed 120 man-hours in the 30 hours between detection and resolution.

Ethereum Gas Price Dips; Here’s Why

April 25, 2021 by Chayanika Deka

Ethereum gas limit has been a bone of contention for the world’s second-largest cryptocurrency ecosystem. This led to an array of EIPs being proposed some of which have been equally controversial to the problem itself.

The recent stats published by Etherscan, however, points to a significant decline in the average gas price since it skyrocketed in mid-2020 and amplified this year. The reduction was subtle but notable and there is more than one reason for it.

Reasons For Ethereum’s Gas Getting Cheaper

The first reason was definitely the gas limit [block size] that was increased by 20%. ETH Miners have raised the network’s gas limit to approximately 15 million for the first time to relieve transaction congestion in the blockchain.

Previously, the gas limit was adjusted to a ceiling of 12.5 million. It was later raised after suggestions from Ethereum Creator Vitalik Buterin as well as major miners, as a temporary fix to rising network fees.

According to Ethereum proponent and investor, Anthony Sassano there are a couple more factors at play. He stated that the latest reduction could also come from reduction could come from the broader use of Flashbots, which is allowing MEV extractors to bypass the mempool.

Flashbots is a platform that supports a transparent Miner Extractable Value [MEV] ecosystem. This organization has been long positive for the reduction of gas price and contribute more than 58% of hash rate, thus surpassing the threshold where the naysayers can no longer compete.

While the aforementioned factors are short-term solutions to the gas menace, in the longer term, it is the development of Ethereum 2.0 that is said to cut down the high fees as well as network congestion. Sassano opined that layer 2 and other blockchains are taking the load off layer 1 which has slashed the network congestion and hence the price.

The investor also went on to speculate that the cryptocurrency market is relatively quiet off late which could lead also to less activity.

Ethereum’s Bullish Catalysts Support Its Price From Facing Intense Sell Pressure

March 22, 2021 by Chayanika Deka

Ethereum [ETH] has so far failed to reclaim its glory days of February this year. $1800 has acted as a significant point of resistance for the crypto-asset in its hike towards the recently established ATH.

At the time of writing, the altcoin was trading at $1,787 after reversing its gains in the weekend pullback. Despite this, the long-term outlook remained bullish.

Ethereum’s Supply Crunch

This was noted by the crypto-analytic platform Santiment whose tweet on the same read,

“Ethereum’s ratio of token supply on exchanges (20.1%) is now sitting at a 28-month low. We generally look for relative drops in exchange supply compared to previous months as an indication of safety from major isolated selloffs for crypto assets.”

Ethereum might not be witnessing a strong momentum at the current level, but industry experts believe that it is still undervalued and is primed for more gains which could in fact materialize if we consider the above chart. The low supply of ETH on various cryptocurrency exchanges could potentially decrease the overall selling pressure on the asset.

It can be speculated that the demand for the asset has noted a significant uptick in tandem with the astonishing growth of the decentralized finance [DeFi] market. Hence, if this trend could catapult Ethereum to higher highs.

Along the same line, the platform asserted,

“..We certainly agree that #DeFi now has a major impact on this metric’s fluctuation, and will continue to do so as the new normal.”

Moreover, the total value in the ETH 2.0 Deposit Contract just reached an ATH of a whopping 3,556,290 ETH. This was indicative of the rising liquidity as well as volatility in the price of the crypto-asset. The fluctuation has been well noted in the chart and this could essentially be an encouraging signal for it.

Historically, whenever Bitcoin has deviated and traded sideways, it was Ethereum that took the charge and outperformed thus paving the way for other large market cap cryptocurrencies to go on a rally. Its reserves on exchanges hitting a 28-month low, the ETH 2.0 deposit contract accelerating as well as the steady uptrend with respect to the number of active traders on the network, are all positive signs for the crypto-asset.

Therefore, both investors and on-chain analysts await ETH to regain the lost momentum.

Ethereum Maxis Deploys Controversial Contract On Binance Smart Chain

February 28, 2021 by Chayanika Deka

The war between Binance Smart Chain [BSC] and the Ethereum network is intensifying in the wake of tremendous DeFi activity. The competition to become a more efficient and better blockchain is far from over and is taking turns that no one ever expected.

Ethereum maximalist reportedly deployed a contract called “TANKS OF TIENANMEN” to the Binance Smart Chain. This was in response to a series of tweets by Binance CEO, Changpeng Zhao who said that “Ethereum is a network for rich guys, but soon those guys will be poor.“

What was the point of the “attack” on Binance Smart Chain?

As CZ criticized Ethereum, singling out its Achilles heel: high fees, the ETH community lashed back by creating a contract with a controversial Chinese subject referring to the infamous Tiananmen Square protests that were student-led demonstrations held in Tiananmen Square, Beijing back in 1989.

For the most part of the year, Binance Smart Chain has witnessed a greater daily transaction volume than Ethereum. As Ethereum’s fees became restrictively high, many people were encouraged to hop onto an alternative despite previously held views regarding centralization and censorship by one of the world’s largest cryptocurrency exchanges.

Decentralization cannot be taught in a day and even as the creation of BSC in itself, as most experts claim, goes against the very ethos of this industry, it still trumps, at least it is currently doing a lot better than Ethereum in terms of activity.

Hence, the Ethereum maximalist went on to create a contract for which Binance could essentially get into trouble if not taken down.

But was the point made?

According to few in the community, the consequence of this stunt could potentially draw physical harm on Binance employees. Some claimed that the move was not necessary since it is already known that Binance Smart Chain is centralized in nature and that CZ can always take down the contract.

Commenting on the weekend fiasco, the founding partner of Primitive Crypto, Dovey Wan believes that it would not have any impact on Binance. Her tweet read,

“Literally zero impact LOL. Just reveal how childish they are, not taking a side simply commenting on this behavior. Chinese gov failed in shutting down even Huobi/Okex while having them operating primarily in the mainland and what they can do with BSC again?”

She defended Binance Smart Chain and went on to say that the latest contract has nothing to do with “cypherpunk spirit” and that “cypherpunk can do much better”. The exec also added,

“If Ethereum ppl believe the future of Ethereum is as bright as Vitalik gone silent, they should know such naive “attack” can barely harm BSC”

Ethereum 2.0’s Early Launch Could Limit Users From Opting For “Cheaper Alternatives”

February 24, 2021 by Sahana Kiran

The Ethereum network has time and again been called out for its high gas fees. While several have been migrating into other networks citing gas fees as the reason, these “other networks” have been called Ethereum Killers.

The high gas fees could undoubtedly stagger the growth of the network. With the members of the network suggesting that Ethereum 2.0 could reduce the gas fees while making the network more secure, a crypto influencer urged the Eth devs to fasten the launch of ETH2.

Ethereum Killers Will Emerge If Eth2 Takes Longer To Launch

Ethereum’s transition from proof-of-work [PoW] to proof-of-stake [PoS] is still underway. With the launch of Phase Zero, the developers of the network affirmed that they were working towards this network-wide upgrade. Eth2 has had a notable past as it has been delayed multiple times. Any further delay could cost the network its users, a prominent crypto personality, who goes by the name, Crypto Lark asserted.

Lark Davis, recently published a video that focused on the repercussions of the high gas fees of the Ethereum network. In his video, Davis pointed out that the high gas fees were driving out small investors as only “rich investors” could afford to pay such transaction fees. Binance’s Smart Chain [BSC] has been garnering a lot of traction lately considering ETH’s fees. The BSC network even went on to record more daily transactions than that of the Ethereum network.

Elaborating on the solutions to these issues, Davis said,

“But we’re now to the point where ETH 1.0 – oh we need ETH 2.0 so soon, come on Vitalik, get it going, man – ETH 1.0, most regular users are priced out of using the majority of applications on Ethereum. […] A transaction on Uniswap costs $50 on average these days and that is just crazy.”

While the network intends to bring in Phase 1 by the end of this year, Davis suggested that it could possibly lose a few of its users by then.

Ethereum 2.0 Finds Shelter On Coinbase Even Before Its Launch

February 18, 2021 by Sahana Kiran

After delaying several times, Ethereum 2.0 had finally made an entry into the crypto-verse. While only Phase zero of the network-wide upgrade made it to the industry, all the other phases are yet to be rolled out. Just as the network is prepping for its huge transition from proof-of-work [PoW] to proof-of-stake [PoS], prominent cryptocurrency exchange, Coinbase affirmed its support for Eth2, specifically by offering staking rewards.

In a recent blog post, the crypto platform announced the latest addition and joined several other exchanges in onboarding Ethereum 2.0.

Ethereum Can Get Coinbase Users Yield Up to 7.5%

Just a few months prior to the launch of Ethereum 2.0 aka Serenity, Coinbase had revealed that it would aid the staking rewards bit of Eth2. Coinbase seemed to be keeping its word as the exchange now offers a waitlist that can be joined by those who wish to stay on par with the potential rollout of the Ethereum 2.0 staking rewards.

In its most recent blog post, Coinbase pointed out that those holding ETH would be able to earn an annual staking reward of about 7.5% just by holding ETH. While this process can secure the ETH blockchain better, the exchange urged people to get in on the action. Those who make it to the waitlist would be offered an array of services once Ethereum 2.0 is rolled out.

Elaborating on the perks of joining the waitlist, the post further read,

“Once off the waitlist, there are no minimum amounts required to stake, and customers can convert, stake, and earn rewards on a portion of Ethereum instead of their entire balance. They will also be able to see their rewards add up in real-time through the lifetime rewards ticker in the Coinbase app or on Coinbase.com.”

As of now, the crypto exchange offers the staking rewards service to Cosmos as well as Tezos, ETH seems to be the latest in the list.

This feature is available for everyone except for those residing in New York.

Ethereum Takes A Plunge Towards Berlin Hard Fork

January 20, 2021 by Sahana Kiran

Ethereum [ETH] remained a constant visitor of the headlines following the launch of Ethereum 2.0’s Phase zero as well as ETH’s price change. As the network’s native cryptocurrency, ETH has been struggling to hit a new all-time high, Ethereum seems to be out and about with its developments.

Ethereum Devs Reveal Specifications For Berlin Hard Fork

The Ethereum network is all about developments. The network has been undergoing an array of developments over the years. While the network is working towards Eth2, a few developers are still operating on developments pertaining to Eth1. The Berlin hard fork has been time and again delayed. However, the developers decided to implement the hard fork during June 2020, after the Istanbul hard fork and Muir Glacier. That evidently was once again postponed.

In more recent updates, James Hancock, the hard fork coordinator for Eth1.0, took to Twitter to announce updates with regard to the Berlin hard fork. Previously, the Berlin hard fork had about eight tentatively accepted EIPs, now the list was edited down to five. These included,

EIP-2565: ModExp Gas Cost
EIP-2315: Simple Subroutines for the EVM
EIP-2929: Gas cost increases for state access opcodes
EIP-2718: Typed Transaction Envelope
EIP-2930: Optional access lists

Hancock affirmed that the code for these EIPs was merged into all the clients part of the network update. A GitHub post revealed that the clients on the list, Geth, Besu, Nethermind as well as OpenEthereum were ready for the hard fork.

Geth was the only client that did not have EIP-2930 i.e. Optional access lists merged into it. However, the latest tweet from the hard fork coordinator asserts that Berlin is just around the corner.

While the network is sprucing up its developments and upgrades, the price of ETH seems to be having a tough time pushing past its previous all-time high. At press time, ETH was trading for $1,368.40 with a 3% surge in the last 24-hours.

Ethereum’s Daily Transaction Vol Goes Parabolic

January 19, 2021 by Chayanika Deka

Ethereum has witnessed impressive growth not just in terms of its price but also with regards to the number of transactions on its network. As one of the leading cryptocurrencies, Ethereum’s daily transaction volume has seen a parabolic rise in its figures.

As noted by Messari’s Ryan Watkins, the Ethereum network was currently settling $12 billion in transactions daily. Bitcoin, on the other hand, records a daily transaction volume of 9.3 billion, approximately $3 billion more than Bitcoin.

The above figure for Ethereum does not include ERC-20s to prevent double-counting from decentralized exchanges [DEXs]. However, Bitcoin’s figures include USDT on Omni. Despite this, Ethereum’s daily transaction volume has surpassed that of Bitcoin by a significant margin.

This can be attributed to the fact that stablecoins and decentralized finance [DeFi] space have been witnessing massive traction especially since mid-2020 which has led the largest altcoin to settle value a lot more than Bitcoin on a daily basis.

Along the same line, CoinMetrics Co-founder, Jacob Franek noted that Ethereum generates more fees than Bitcoin and settles more value. He further went on to explain that this was a good sign since cumulative fees are the most direct measure of aggregate willingness to pay for block space, which indicated a trend of rising demand. He also added,

“Ethereum has the most valuable block space in crypto now. Would it be better if individual tx fees were lower? Yes. That will come with L2 and other scaling efforts.”

Ethereum Still Up by 15% off Its ATH

The premier altcoin has endured a prolonged period of consolidation that started last week. This, in turn, has facilitated the ETH market to flush out weak hands. At the time of writing, the crypto-asset was in the middle of a fresh rally while Bitcoin continued to take control of $40k.

The reason why Ether is expected to undergo a continued strong price momentum triggered is primarily due to the launch of ETH 2.0 and also the imminent rollout of CME futures next month. In fact, the 2.0 is expected to potentially bolster the DeFi economy in general as the space as a whole will benefit from a substantial decline in transaction fees as well as less congestion.

Total ETH Staked For Ethereum 2.0 Is Up by 250% Of Phase 0 Goal

December 10, 2020 by Chayanika Deka

Ethereum 2.0 Beacon Chain was launched a week back. Since the ambitious roll-out, the balance of ETH in the deposit contract has kept on rolling in. This was revealed by the blockchain technology intelligence platform, Glassnode.

As the Ethereum 2.0 deposit contract continued to accumulate ETH, the total value staked climbed up to nearly 1.3 million ETH which happens to be around 250% of the phase 0 target. Initially, the contract required around 500,000 ETH to secure network operations, but the number has been on a rise. On the 8th of December alone, more than 81,500 ETH were deposited to the contract.

In addition, the number of blocks and epochs finalized on the network has also risen significantly. This has been positive for the amount of rewards validators accrue daily

As the deposit contract continued to amass close to 40k ETH a day, there could be 15 million ETH in the contract by this time next year if the pace continued. This was revealed by Ethereum core developer Eric Connor.

This essentially meant that a lot more than 1% of the total circulating supply of ETH is locked into securing the new Proof-of-Stake [PoS] network. However, there is a catch. The deposited funds cannot be moved until the ether devs activate a two-way bridge between the current Ethereum blockchain and Ethreum 2.0.

All that a user can do is to validate on Ethereum 2.0 which involves proposing new blocks and attesting to blocks that other validators have proposed. With each process, the validators earn incentives which are then added to their staked ETH.

Furthermore, it is important to note that the deposit contract has been receiving more of the crypto-asset than it is allowed to allot to new nodes per day. In the current scenario, there is a cap placed with regards to the number of validators that can be added each day to Ethereum 2.0 with the upper limit being 900 validators each holding 32 ETH each.

Meaning, just 28.8K new ETH that is being deposited will be deployed in the creation of new nodes while all other coins will have to queue up until a new daily limit is alloted.

Ethereum 2.0

Is Ethereum’s [ETH] Sell-side Pressure Diminishing?

What does Ethereum on-chain metrics depict?