While the Bear Market’s Claws Drag ETH Prices Down, Ethereum Network Fees Remain Low

July 31, 2022 Bitcoin.com

Polygon zero-knowledge EVM rollup aims cheaper Web3 transactions

July 20, 2022 Coin Telegraph

Polygon uses zero-knowledge proof to club multiple transactions into groups before relaying them over to the Ethereum blockchain as a single transaction.

Polygon, a Web3 infrastructure on the Ethereum blockchain, announced the launch of Polygon zkEVM or zero-knowledge Ethereum Virtual Machine, a Layer-2 scaling solution aimed at reducing transaction costs and improving scalability.

The new zero-knowledge (ZK) scaling solution, Polygon zkEVM, operates in full compatibility with existing Ethereum (ETH)-based smart contracts, developer tools and wallets using zero-knowledge cryptography protocol, a.k.a. zk proof. Polygon uses zk proof to club multiple transactions into groups before relaying them over to the Ethereum blockchain as a single transaction.

This ability to transmit multiple transactions as a single transaction results in lesser gas fees, which can be split between the various senders involved in the transaction — thus bringing down the gas fees when compared to sending them sepeartly over the Ethereum blockchain.

While investors were subject to exorbitant gas owing to the rise in on-chain transactions, Ethereum's average gas fee fell down to $1.57 — a number last seen in December 2020.

*Ethereum average transaction fee YTD. Source: BitInfoCharts*

As a result, Polygon zkEVM is well-positioned to bring down the infamous gas prices further. Polygon promises faster settlement and far better capital efficiency through the newly-launched solution, adding to its capability in easy migration of EVM-compatible decentralized applications (dApps) over to zkEVM.

Moreover, the company revealed that the solution also caters to the seamless creation of nonfungible tokens (NFT) and other blockchain-based applications. When compared to layer-1 solutions, Polygon estimates a 90% reduction in costs by using the zk-rollup approach.

While sub-ecosystems continue to launch solutions hoping to improve major blockchains like Bitcoin (ETH) and Ethereum, in-house developers support the drive by implementing consensus-based upgrades.

In a recent conference call, core Ethereum developer Tim Beiko propose September 19 as the tentative target date for the crucial transition from proof-of-work (PoW) mining consensus to proof-of-stake (PoS).

This merge timeline isn't final, but it's extremely exciting to see it coming together. Please regard this as a planning timeline and look out for official announcements!https://t.co/ttutBceZ21 pic.twitter.com/MY8VFOv0SI
— superphiz.eth (@superphiz) July 14, 2022

Following up on the discussion, Ethereum developer superphiz.eth shared the roadmap and clarified that the proposed target date should be seen as a roadmap rather than a hard deadline.

Bitcoin per transaction cost goes down every four years, coincidence?

July 18, 2022 Coin Telegraph

Bitcoin Community

The cost per Bitcoin transaction is calculated by dividing miners' revenue by the number of transactions, thus implying an unpredictive trend.

Diving deep into the thirteen-year-old Bitcoin (BTC) ecosystem makes one come across interesting patterns powered organically by investor sentiment and market conditions. With BTC’s per transaction cost coming down to $56.846 on July 14, the ecosystem unveiled a cycle wherein the per transaction costs invariably fall every four years.

The cost per Bitcoin transaction is calculated by dividing miners' revenue by the number of transactions, thus implying an unpredictive trend — however, data from Blockchain.com reveals a pattern many would find satisfying.

*Bitcoin cost per transaction YTD. Source: blockchain.com*

The cost per transaction dropped over 81% in July 2022 from its all-time high of $300.331 in May 2021, factored by a combination of a prolonged bear market and fewer on-chain transactions due to regulatory hurdles imposed on the general investors.

However, the rise and fall of the cost per transaction is a pattern seen every four years. Ever since its launch in 2009, Bitcoin’s cost per transaction went through its rollercoaster cycle three times — in 2014, 2018 and 2022.

If history were to repeat itself regardless of market conditions, the cost per transaction would overshadow the current all-time high by 2026, which would be accompanied by an eventual downfall around the $50 range.

Overall, miners’ revenue has also seen a significant reduction throughout the year 2022, with July marking the month of lowest income from Bitcoin mining in over two years.

Impacted by the falling market prices, Bitcoin miners found themselves barely making profits owing to the high operating costs associated with BTC mining. However, falling graphic cards or GPU prices are set to offset the losses as miners get access to affordable mining hardware.

*GPU price trend over the past one year. Source: TechSpot*

With card manufacturers resuming operations following the end of the global chip shortage, GPU prices declined massively, with some cards selling for below MSRPs. In May 2022, mining hardware prices dropped over 15% on average as supply exceeded the market demand.

DeFi’s downturn deepens, but protocols with revenue and fee sharing could thrive

July 15, 2022 Coin Telegraph

Altcoin Watch

It’s too early to know if DeFi is “dead,” but platforms that share revenue with liquidity providers and token holders could be the ones that survive the bear market.

At the moment, liquidity is hard to come by, but crypto traders and protocols still need inflow and revenue to remain functional.

As the crypto winter drags on, savvy crypto investors have realized that one of the reliable sources of passive income that still exists can be found on protocols that generate revenue and share some of it with their respective communities.

Platforms that earn real yield through useage fees are the obvious winner in the bear market, That mean perpetuals and options as they are profitable bear or bull. Thats why #GMX is hot, #snx fees up massively and #eth is just a no brainer.
— Collingwood.lens (@Fraxima1ist) July 13, 2022

Let's take a look at some of the protocols that continue to thrive in the current down market.

DeFi might be dead, but platforms with revenue will thrive

Data from Token Terminal shows revenue positive platforms are primarily the nonfungible token (NFT) marketplaces like LooksRare and OpenSea.

*Top dapps based on cumulative protocol revenue in the past 180 days. Source: Token Terminal*

Aside from a few select protocols including MetaMask, Decentral Games, Axie Infinity and Ethereum Name Service, the majority of the remaining protocols with the highest revenue are decentralized finance platforms, showing that while DeFi is down, it's not out of the game.

Fee sharing helps to lure liquidity

DeFi protocols and decentralized applications (DApps) that offer fee sharing to token holders and liquidity providers are also revenue positive.

Historical view of crypto/web3 projects that generate fee revenue to their token holders.

Protocol revenue market share leaders in '21:
Q1: MakerDAO
Q2: PancakeSwap
Q3: Axie Infinity
Q4: Ethereum pic.twitter.com/zNRFnss7c4
— Token Terminal (@tokenterminal) January 29, 2022

As the bear market continues to batter prices and eliminate unprofitable and poorly managed platforms, protocols that offer token holders passive income streams have a higher chance of enduring until the next bull market begins.

Synthetix (SNX) makes a comeback

A good example of how fee sharing can help boost a token and DeFi protocol was recently seen with Synthetix (SNX), which made waves when it partnered with Curve Finance to create Curve pools for several of its Synths assets.

Since the cross-chain collaboration was established, the protocol revenue for Synthetix has seen a tremendous increase that coincided with a rise in the price of SNX from $1.56 to its current price at $2.59.

*SNX daily price vs. protocol revenue in the past 180 days. Source: Token Terminal*

The increase in revenue did not go unnoticed by crypto Twitter, which was quick to point out the rapid turnaround for the platform.

$SNX @synthetix_io bypassed @AaveAave in daily fees Also, @SushiSwap @CurveFinance @MakerDAO combined. pic.twitter.com/w1dBVHL2YD
— Wega (@William24931283) July 7, 2022

How it all plays out for Synthetix in the long run, is anyone’s guess. For now, the platform is demonstrating that generating revenue and sharing some of that revenue with token holders is one way to retain market share during a market downturn.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Binance users support 0-fee trading despite CZ’s wash trading concerns

July 9, 2022 Coin Telegraph

Binance

CZ is open to implementing the changes regardless of the challenges that a new system would bring, as he said, “Let’s see what the poll say. We listen to our users.”

Both traditional and crypto investors consider trading fees as one of the most significant liabilities when it comes to investing over exchanges. So no wonder when Changpeng “CZ” Zhao, the founder and CEO of Binance, asked investors about their interest in trading on the crypto exchange with no fees, the response was a resounding yes despite the inherent risks pointed out by the entrepreneur.

Binance stands as the biggest crypto exchange, outdoing its nearest competition FTX by 10x in terms of the trading volume. Zhao, known for implementing features based on community feedback, reached out over Twitter to gauge investor sentiment regarding the complete removal of trading fees.

0 fee trading @binance creates a few problems, wash trading, VIP tiers, etc. A thread

Do you still want it? 1/4.
— CZ Binance (@cz_binance) July 8, 2022

While 0-fee trading may seem ideal for investors, CZ pointed out some of the issues it may sprout in the process — one of them being wash trading. Wash trading, wherein a user makes a series of buys and sells to manipulate market activity, can be used to go up the VIP tiers on Binance.

Moreover, CZ stated that bringing 0-fee trading to the masses will require Binance to implement numerous safeguards, which include detection tools for identifying illegitimate trades. Each VIP tier is tied to certain trading benefits including lower trading fees. As a result, professional poker player Brian Rast asked “So if there are no fees, why do you need VIP tiers?”

Over 30,600 investors voted on CZ’s poll at the time of writing — with around 65.5% inclined to trade with no fee whatsoever. CZ is open to implementing the changes regardless of the challenges that a new system would bring:

“Let's see what the poll say. We listen to our users.”

Binance continues to spread its roots across the world as it steadily acquires registrations and operational licenses from regulators.

Maintaining its expansion streak, Binance’s Spanish subsidiary, Moon Tech Spain, got registered as a VASP by Spain’s central bank on Thursday. CZ attributed the development to Binance’s intent to protect users:

“Effective regulation is essential for the widespread adoption of cryptocurrencies. We have invested significantly in compliance and introduced AMLD 5 and 6 compliant tools and policies to ensure that our platform remains the safest and most trustworthy in the industry.”

Ethereum average gas fee falls down to $1.57, the lowest since 2020

July 3, 2022 Coin Telegraph

Ethereum average gas fee falls down to .57, the lowest since 2020

Coin Telegraph

For nearly two years, between Jan. 2021 and May 2022, the average gas fee required by the Ethereum network was roughly $40, with May 1, 2022 recording the highest average daily gas cost of $196.638.

The Ethereum (ETH) ecosystem’s biggest roadblock to mainstream dominance is often attributed to the extremely high transaction fees or gas fees it requires to complete a transaction. However, with Ethereum’s average gas fees coming down to 0.0015 ETH, the narrative is set to change.

The average transaction fee on the Ethereum blockchain fell down to 0.0015 ETH or $1.57 — a number previously seen in December 2020. However, starting in January 2021, Ethereum’s gas fees surged owing to the hype around nonfungible tokens (NFT), decentralized finance (DeFi) and a promising bull market.

For nearly two years, between Jan. 2021 and May 2022, the average gas fee required by the Ethereum network was roughly $40, with May 1, 2022 recording the highest gas cost of $196.638 — as evidenced by data from BitInfoCharts.

Supporting this sudden drop in gas prices, Cointelegraph uncovered on Saturday that the daily NFTs sales have also dropped to one-year lows. The NFT ecosystem recorded its worst performance of the year in June as the total number of daily sales fell to roughly 19,000 with an estimated value of $13.8 million.

*Number of daily NFT sales between June 2021 - June 2022. Source: NonFungible*

In November 2021, back when numerous investors reported outrageous gas fees, Ethereum co-founder Vitalik Buterin published a decrease-cost-and-cap proposal to reduce unprecedented levels of strain on the network. Buterin had proposed a short-term solution to further cut rollup costs by introducing a calldata limit per block to lower ETH gas costs.

Ethereum liquidity provider XCarnival recovered 1,467 ETH just a day after suffering an exploit that drained 3,087 ETH, worth roughly $3.8 million, from the protocol.

XCarnival was attacked on June 26, 2022 and suspended part of the protocol. XCarnival officials will give 0xb7CBB4d43F1e08327A90B32A8417688C9D0B800a owner 1500 ETH bounty.
At the same time, XCarnival officals explicitly exempt the person from legal action.

By XCarnival team
— XCarnival (@XCarnival_Lab) June 27, 2022

Blockchain investigator Peckshield explained the nature of the attack by stating:

“The hack is made possible by allowing a withdrawn pledged NFT to be still used as the collateral, which is then exploited by the hacker to drain assets from the pool.”

Ethereum Transfer Costs Continue to Slide — Network Fees Tap a 19-Month Low

July 3, 2022 Bitcoin.com

Bitcoin mining revenue mirrors 2021 lows, right before BTC breached $69K

June 28, 2022 Coin Telegraph

Bitcoin mining

The key to survival for Bitcoin miners boils down to the delicate balance between the revenue and the operating cash flow.

Bitcoin (BTC) visiting the $20,000 range after one and a half years made mining — the most important job of the ecosystem — a costly affair. However, if history were to repeat itself, BTC investors may witness another epic bull run that previously helped Bitcoin reach an all-time high of $69,000.

Changes in Bitcoin prices directly impact the miners’ income, who earn fixed block rewards and transaction fees in BTC for running their mining operations. In June 2022, the total mining revenue dipped below the $20 million range, with Blockchain.com data recording the lowest dip of $14.401 million on June 17.

Total miners revenue over time. Source: blockchain.com

As shown above, the recent dip in Bitcoin mining revenue was last seen one year back when the total value tanked to $13.065 million on June 27, 2021 — back when BTC traded at roughly $34,000. What followed after that was Bitcoin’s 5-month-long epic bull run, which was supported by pro-crypto initiatives such as El Salvador’s BTC acceptance and crypto-friendly regulations across the globe.

Despite mixed sentiments about the recovery of the crypto ecosystem, small-time investors are found to have increased their investment efforts amid the bear market as they fulfill their long-term dream of owning one full BTC (1 BTC). Global recession, geopolitical tensions, falling crypto economies like Terra (LUNA) and an ongoing pandemic currently hold the Bitcoin ecosystem from unleashing its true potential.

Monthly operating cash flow Vs. mining revenue. Source: Arcane Crypto

A report shared by crypto-focused financial services firm Arcane Crypto revealed that potential of several public bitcoin miners to survive the ongoing bear market. The key to survival for Bitcoin miners boils down to the delicate balance between the revenue and the operating cash flow.

Based on the report, Argo, CleanSpark, Stronghold, Marathon and Roit are the best-positioned miners to sustain the crypto winter. At the same time, major player Core has nearly matched its operational costs to its total revenue.

Bitcoin mining hardware and hosting company Compass Mining lost one of its Maine-based hosting facilities after failing to pay the electricity bills.

Effective June 14th @compass_mining facility hosting agreement in Maine was terminated by @dynamics2k for failure to pay power consumption charges. 6 late payment and 3 non payments. @MiningScandals pic.twitter.com/cSfnWMmqTY
— DynamicsMining (@DynamicsMining) June 27, 2022

Dynamics Mining, the owner of the mine hosting facility, alleged that Compass Mining has six late payments and three non-payments related to utility bills and hosting fees, stating “all you had to was pay $250,000 for 3 months of power consumption.”

Finance Redefined: Uniswap goes against the bearish trends, overtakes Ethereum

June 24, 2022 Coin Telegraph

Bancor

The top 100 DeFi tokens showed signs of recovery after last week’s mayhem, and many of the these tokens registered double-digit gains.

This past week, the decentralized finance (DeFi) ecosystem tried gaining some momentum amid the bear market crash. Uniswap saw a trend reversal and overtook Ethereum regarding network fees paid. However, not all DeFi protocols were as lucky, as Bancor had to pause its “impermanent loss protection” in the wake of a hostile market.

DappRadar’s report shows that the GameFi ecosystem continues to thrive despite the current downturn in the market. Solend invalidates Solana whale wallet takeover plan with second governance vote.

The top 100 DeFi tokens showed signs of recovery after last week’s mayhem, and several of the tokens registered double-digit gains.

DeFi Summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

Decentralized exchange (DEX) Uniswap has overtaken its host blockchain Ethereum in terms of fees paid over a seven-day rolling average.

The surge appears part of a recent spate of high demand for DeFi amid the current bear market. Decentralized finance (DeFi) platforms such as Aave and Synthetix have seen surges in fees paid over the past seven days, while their native tokens and others such as Compound (COMP) have also boomed in price.

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GameFi continues to grow despite crypto winter: DappRadar report

Blockchain games were the subject of the latest DappRadar x BGA Games Report #5, published Tuesday. The report looked at healthy ecosystems and investments in GameFi and metaverse markets.

The report covered several projects in detail, outlining their continued success and growth. Splinterlands, Illuvium, Galaverse and STEPN have continued bringing new players to their platforms, gaining financial interest and expanding their businesses.

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Bancor pauses impermanent loss protection citing ‘hostile’ market conditions

Bancor, a DeFi protocol often credited as the pioneer of the DeFi space, paused its impermanent loss protection (ILP) function on Sunday, citing “hostile” market conditions.

In a blog post on Monday, the DeFi protocol noted that the ILP pause is a temporary measure to protect the protocol and the users. When a user gives liquidity to a liquidity pool, the ratio of their deposited assets changes at a later moment, potentially leaving investors with more of the lower value token, this is known as impermanent loss.

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Solend invalidates Solana whale wallet takeover plan with second governance vote

Solana-based DeFi lending protocol Solend has created another governance vote to invalidate the recently-approved proposal that gave Solend Labs “emergency powers” to access a whale’s wallet to avoid liquidation.

On Sunday, the crypto lending platform launched a governance vote titled “SLND1: Mitigate Risk From Whale.” It allowed Solend to reduce the risk the whale’s liquidation poses to the market by letting the lending platform access the whale’s wallet and letting the liquidations happen over the counter.

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DeFi market overview

Analytical data reveals that DeFi’s total value locked registered a minor recovery rising above $56 billion. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top-100 tokens by market capitalization were on the move, and many of the tokens registered double-digit gains over the past week.

The majority of the DeFi tokens in the top 100 ranking by market cap were trading in green. Synthetix (SYX) registered the biggest gain with a 90% surge over the past week, followed by Uniswap (UNI), which saw a 37% appreciation in price in the past seven days. COMP gained 31%, while Thorchain (THOR) saw a 22% rise.

Before you go!

Celsius network, the lending platform that has been in trouble over liquidations and lack of Capital, saw a community-led short squeeze of its native token, CEL. It registered a 300% jump over the past week amid market uncertainty over its future.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

Coinbase to shut down Coinbase Pro to merge trading services

June 23, 2022 Coin Telegraph

Coin Telegraph

Launched in 2018, Coinbase Pro is designed to feature unlimited trading volumes, supporting more than 250 cryptocurrencies.

Coinbase’s professional trading platform Coinbase Pro will cease to exist as the cryptocurrency exchange is restructuring services to bring them all into one platform.

The United States-based crypto trading firm Coinbase officially announced on June 22 that it will start sunsetting Coinbase Pro to migrate all advanced trading services into one unified Coinbase account.

Coinbase Pro’s services will migrate to Advanced Trade, Coinbase’s new trading section available on the exchange’s main website, Coinbase.com. The section was initially launched in March 2022, providing traders with in-depth analysis and actual trading directly on Coinbase.

According to the announcement, Advanced Trade will provide the same volume-based fees as Coinbase Pro. Depending on volumes and taker or maker orders, Coinbase Pro’s fees range from 0% to 0.6%, according to data from Coinbase’s official website at the time of writing.

The upcoming migration of Coinbase Pro to Advanced Trade will take place gradually over the next several months as the exchange will continue to launch new upgrades to Advanced Trade.

Coinbase noted that it will notify its customers about exact dates for sunsetting Coinbase Pro, adding:

“For customers holding funds on Coinbase Pro, there is no action to take- funds will remain safe on Coinbase. Meanwhile, customers are welcome to begin using Advanced Trade on the Coinbase mobile app and Coinbase.com.”

According to the announcement, the migration aims to simplify the trading process on Coinbase by allowing professional traders to access advanced trading tools and use general Coinbase features in one place, using one balance. “In the past, advanced traders have used Coinbase Pro for more in-depth trades and analysis. But in order to use other Coinbase features, you had to transfer funds to your primary Coinbase account,” the firm said.

Launched in 2012, Coinbase is a publicly-traded company and is one of the largest crypto trading platforms in the world. The company launched Coinbase Pro in 2018, targeting professional investors and focusing on expanded trading services, providing exposure to more cryptocurrencies.

The original Coinbase platform primarily targeted beginners, reportedly supporting around 100 cryptocurrencies, while Coinbase Pro provided exposure to over 250 digital assets. Coinbase Pro also offers unlimited trading amounts, while the original general Coinbase platform’s trading volume is capped depending on payment methods and regions.

Fees

DeFi might be dead, but platforms with revenue will thrive

Fee sharing helps to lure liquidity

Synthetix (SNX) makes a comeback

DeFi Summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

GameFi continues to grow despite crypto winter: DappRadar report

Bancor pauses impermanent loss protection citing ‘hostile’ market conditions

Solend invalidates Solana whale wallet takeover plan with second governance vote

DeFi market overview

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