Ethereum reached all-time highs after a hard April. Developers and analisdollarser are exploring the factors behind the ETH price increase.
Following the recent slump in the cryptocurrency markets, Ethereum has hit all-time highs along with a number of key events and metrics. Overall, by 2021, the developers will be the Eth2 of the network. It will be a very important year for the Ethereum blockchain as it continues to work for its integration with 0. Ethereum will move from the proof of work phase to the proof of stake phase. This system will solve both the energy problem and the cost problem.
While the technical details do not concern many daily Ethereum (ETH) users and traders, when ETH’s recent price action, coupled with a number of key events, ETH’s move towards a new all-time record may be a matter of time.
The price of ETH has increased by about 15% last week, and its market value has reached $ 312 billion. The price of ETH continued to rise as reports emerged on April 28 that the European Investment Bank launched a “digital bond” sale on the Ethereum blockchain.
These bonds hold a substantial value of about $ 120 million in two years, with Goldman Sachs, Banco Santander and Societe Generale, the leading heavyweights in the series of financial services leading the management of the bonds. Most importantly, the bonds were posted directly on the Ethereum blockchain.
As the Ethereum ecosystem, major decentralized finance platforms Uniswap, Compound, Maker and other leaders were on their way to exceeding $ 73 billion for the net worth unlocked to their smart contracts on the Ethereum blockchain, they took another milestone towards the end of April. This indicates an increase of $ 18 billion in a month.
Another factor that pushed the price of ETH to all-time highs is the record open position on Ethereum options contracts, which hit an all-time high of about $ 4.2 billion in April. As previously reported, $ 930 million of these options were set to expire at the end of the month, and buyers were allowed to buy ETH at a price agreed in advance with the seller of each contract.
Analisdollarser seem to agree that a multitude of factors are influencing Ethereum’s recent all-time highs. Simon Peters, a market analyst at the EToro social trading platform, points out that the popularity and success of DeFi platforms and other Ethereum-powered applications are turning institutional investors into ETH:
“At the heart of this is the demand from institutional investors. But now they may have turned to Bitcoin, institutions are now raising their risks and Ethereum is the next natural choice, ”he said.
Johannes Rude Jensen, product and project manager for EToroX Labs, highlighted the EIB’s Ethereum-based bond issuance as an important milestone in the adoption of blockchain technology in the traditional banking industry. Jensen said blockchain-based bond issues have gained interest as a response to the fiscal settlement processes in analog traditional bond markets. Jensen also stated that in line with the ECB’s recent emphasis on green banking, the EIB signaled its intention to play an increasingly active role in pursuing the EU’s climate and innovation policy by choosing Ethereum.
Jensen acknowledged the move is an indicator that major banks and financial institutions are going to use public blockchains for more traditional financial products in the future. This points to the general open standards trend in corporate banking:
“Having a single source of consolidated data in the bond markets will reduce reliance on brokers, which will likely reduce cost and support risk reduction in pre- and post-issue processes. ”
Jordan Stoev, head of crypto and commerce at financial services providers Skrill & Neteller, highlighted that Ethereum’s users and active wallets are always at the highest levels. Stoev said the growing popularity of DeFi platforms and decentralized applications is a major factor attracting investors to Ethereum:
“Unlike previous cycles, when ICOs and speculation are the main drivers of Ethereum growth, this cycle has legitimate use cases like DeFi and NFTs and others that people actually use. Highly anticipated upgrades such as EIP-1559 and Eth2 are also expected to further increase Ethereum availability, speed, and price, and investors want to get in before these developments happen. ”
One Step Closer to London
Ethereum’s evolution towards a Proof of Stake future also continued this month, as the latest Berlin upgrade brought several important Ethereum Improvement Proposals to the blockchain protocol.
With Berlin alive since April 15, the ecosystem has had some time to measure the effects of the four EIPs that form part of the latest update. Ethereum analyst Viktor Bunin said that at the end of EIP-2929 “will guarantee the maximum proof of Merkle required to validate a particular block” but will ultimately aim to achieve two main goals.
According to him, “it mitigates Ethereum’s largest remaining DoS vector; Here an attacker can slow down the network by sending transactions that access the storage in a very cheap but time-consuming manner for the nodes to process. ”
Bunin also stated that, ultimately, “EIP brings us closer to stateless clients, which will allow devices such as mobile phones to interact with Ethereum without relying on running a full node.”
Bunin also added that the change in the range of gas costs coming with the EIP-2929 could negatively impact some smart contracts based on previous gas cost figures. Mattison Asher of ConsenSys, who has researched Ethereum, immutable tokens and decentralized finance, highlighted the role of the EIP-2930 in offsetting gas spikes caused by the previous EIP.
“The EIP-2930 reduces some of the gas spikes from the EIP-2929 by providing an access list, an address list, and a type of transaction that includes the storage keys the process plans to access. Accessing these variables will be cheaper than accessing variables outside of the list. This effectively reduces some of the potential gas increase in the EIP-2929. ”
The next proposal, EIP-2565, will also introduce some fee-reducing measures for certain cryptographic functions. As Bunin explains, this will make it cheaper to perform functions such as signatures, verifiable delay functions, SNARKs, and other applications. Asher would highlight the importance of this EIP in reducing the cost of gas associated with many functions required to use and develop Ethereum.
The EIP-2718 offers a way to speed up the addition of support for different types of transactions. This is a useful development that will essentially reduce the complexity of certain smart contract transactions and parameters.
Placing Important Blocks for the Integration of ETH2
There is often a remarkable community response to the latest improvements to Ethereum’s protocol. However, the average user is unlikely to notice much change in the way they use ETH or interact with the blockchain through normal transactions.
It may take some time for the changes brought by these four EIPs to be implemented by Ethereum developers working on a variety of decentralized applications that could benefit from the new offerings. One of the suggested transaction types is a layered multisignature type. Bitcoin has this feature, but not Ethereum, so multiple signatures in Ethereum can only be created through smart contracts such as Gnosis Safe.
Developer Nick Johnson said that an important function of EIP-2929 in the gradual transition to ETH2 would make the stateless Ethereum more viable by reducing the maximum number of reads. Stateless approaches are an important part of the Eth2 roadmap. “
Meanwhile, Bunin pointed to EIP-2565 as an important foundation in Ethereum’s ability to integrate advanced cryptography in the future. “Justin Drake coined the term” lunar math “to describe the advanced cryptography that made the Eth2 dream possible. The basis of these is the thinking around the parts used as the data availability layer for the second layer scalability solutions. Therefore, according to him: “Very promising solutions like zk-rollups depend on an Ethereum layer that supports advanced forms of cryptography, so this EIP goes a long way towards that. ”
Upcoming London Hard Fork
The Berlin hard fork was implemented with very little reaction from the wider cryptocurrency community. Bunin believes this is largely unlike the Ethereum London hard fork, which includes the splitter EIP-1559, that the upgrade does not contain any controversial EIPs. According to him, this “will change the way users pay for gas, which will improve the user experience and start burning some of the ETH spent on the transaction fee. At the same time, Eth2 will experience its first upgrade called Altair. “
Bunin explored changes to the Ethereum network in his latest update for Bison Trails. The key takeaways are 3.5 million ETH unlocked to the Eth2 smart contract, currently worth about $ 6.5 billion, or 3% of the total amount of ETH in circulation. There are currently 110,000 verifiers and counting.
Johnson put special emphasis on the importance of upgrades to smart contract functionality as well as the impact of the London hard fork on the series of transaction fees. “It will also enable smart contracts to impose the ‘base fee’, which is the gas cost of the current block, and this will enable projects such as gas price derivatives and tokens. ”
Sajida Zouarhi, senior product manager for ConsenSys’ Besu mainnet client, gave an overview of the next steps in Ethereum’s evolution and the positive progress made in the march towards Eth2. The next step is the London hard fork. Notable EIPs are 1559 (Basefee) and 3238 (Ethereum Difficulty Bomb Delay), which will later lead to consolidation and sharg, which is Ethereum’s transition from proof of work to proof of stake.