DeFi

Ethereum has burned $12.7 billion since the London hard fork. But it could slow down – DL News

Published

9 months ago

8 May, 2024

Ethereum has burned $12.7 billion since the London hard fork. But it could slow down – DL News

It’s been 1,000 days since Ethereum started charging transaction fees.
But the mechanism that compensates for new tokens issued on the network is slowing down.
More efficient transactions, an explosion of activity on Layer 2 networks, and the recent Dencun upgrade have all helped reduce the amount of Ether burned by the network.

With the implementation of an upgrade known as EIP-1559 as part of the London hard fork in August 2021, Ethereum became the first blockchain to start burning a portion of the fees users spend for transactions.

It was 1,000 days ago.

The move, blockchain faithful hoped, would help offset the issuance of new Ether tokens on the network, creating a more sustainable monetary policy.

And it worked. Over the next 1,000 days, Ethereum users burned some 4.3 million etherworth over $12.7 billion just from using the network.

When Ethereum reduced its Ether emissions by moving to a proof-of-stake consensus mechanism in September 2022, the network became deflationary, meaning that more Ether was, on average, burned by the network than no new Ether has been issued.

But in recent months, the rate at which Ethereum burns tokens has slowed.

A combination of more efficient transactions, an explosion of activity on layer 2 networks, and the recent Dencun upgrade have all helped to reduce transaction fees – and therefore the amount of Ether burned by the network.

Lower fees are great for users. But if Ethereum fails to attract enough activity to offset the decline, it could easily lose its deflationary status, potentially calling its business model into question.

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Why is the burn slowing down?

When Ethereum users transact on the network, they must pay fees denominated in Ether.

These fees are made up of two parts: so-called base fees charged by the network and priority fees, paid to block builders to encourage them to process the transaction more quickly. Ethereum burns base fees and gives priority fees to those who process transactions.

When activity on Ethereum increases, the network automatically increases the base fees that users must pay.

Average base fees on Ethereum need to stay above 23 gwei these days to ensure the network burns enough ether through transaction fees to keep it deflationary. Gwei is a measure of small amounts of ether.

Over the past 1,000 days, gas costs have averaged 41 gwei. If this trend continues, Ethereum supply is expected to decrease by 0.76% over the coming year.

But there are reasons to believe that this is not the case.

Ethereum’s March 13 Dencun upgrade introduced a new feature that reduced the fees that Ethereum Layer 2 had to pay to submit transactions to the Ethereum mainnet by up to 98%.

Since Dencun, Ethereum transaction fees have fallen from an average of 58 gwei on March 13 to just 7 gwei on May 2.

Additionally, more users are moving from Ethereum to Layer 2 networks – separate blockchains built on top of Ethereum that rely on it for security.

After reaching an all-time high of over 11 million weekly transactions in 2021, transactions on Ethereum slowly declined to around 8 million per week by the end of March.

At the same time, weekly transactions on Arbitrum and Optimism, the two largest Layer 2s, climbed to a combined figure. 18.5 million.

With fewer users transacting on Ethereum, the demand for transactions – and therefore the fees paid on the network – decreases.

Increased gas efficiency

Code improvements that reduce the amount of data that smart contracts on Ethereum must handle are also expected to reduce fees in the coming months.

For example, decentralized exchange Uniswap, the most frequently used Ethereum DeFi protocol on which users have spent over $1.4 billion in transaction fees, has included several optimizations for its upcoming release Uniswap v4.

V4 should improve gas efficiency between swaps and liquidity operations, as well as reducing the cost of creating new liquidity pools by 99%.

Future versions of other major Ethereum protocols will likely also be optimized for transaction fees.

Tim Craig is a DeFi correspondent at DL News. Do you have any advice? Send him an email to tim@dlnews.com.

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DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

Discover the exciting opportunities of the Rollblock (RBLK) presale today!

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DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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