Ethereum gas fee jumped due to memecoin frenzy with mixed comments on network usability

April 20, 2023 Coin Telegraph

Ethereum proponents celebrated the growth in daily revenue, while many others pointed toward network congestion and difficulty in usage.

Ethereum network’s gas fee skyrocketed to a new multi-month high amid a growing memecoin frenzy. The high transaction fee has swelled Ethereum’s daily revenue multifold compared to Bitcoin (BTC). While Ethereum proponents celebrated the growth in revenue, many others were quick to point out the growing congestion on the network and the difficulty in processing transactions.

There was an unusual shift in the top 10 gas-burning altcoins where instead of ETH (ETH), WETH, and USDT (USDT), memecoins such as TROLL, APEDand BOBO were among the top 10 spenders.

⛽️ A highly unusual shift in top 10 gas burning #altcoins has emerged today. Instead of $ETH, $WETH, and $USDT being at the top of the fee distribution list, we're seeing new assets like $TROLL, $APED, and $BOBO among them. Read our latest deep dive. https://t.co/7SlmJ59k2m pic.twitter.com/Y2kaLKZTrL
— Santiment (@santimentfeed) April 19, 2023

The average gas price for Ethereum transactions as of April 20 was 81.94 gwei, up from 60.82 gwei on April 19 and 44.42 gwei last year — an increase of 34.74% from April 19 and 84.46% from April 20, 2022. Gwei is a denomination of the Ether and represents one billionth of one ETH.

*ETH gas fee increase in last month. Source: Ychart*

Independent Ethereum educator Anthony Sassano shared the surge in daily fee revenue of the Ethereum network and said that the second-largest blockchain had brought in 28 times the revenue of Bitcoin. He also cited Ethereum layer-2 platforms like Arbitrum One that have outperformed the BTC network in terms of daily revenue due to the ongoing meme frenzy.

*Daily and weekly revenue of various blockchain. Source: Twitter*

Ethereum proponent’s main argument is that the high gas fee and subsequent higher revenue highlight the network’s growing usability. However, many on Crypto Twitter were quick to point out that the extensive usage they are referring to is just a few thousand users gambling on memecoins.

The extensive usage you’re talking about are a few thousand users gambling meme coins. I thought (and hoped) eth was supposed to be the future of finance
— nap.BasicallyRiskFree (@CryptoPannella) April 20, 2023

A few users reportedly paid gas fees as high as a few hundred dollars, while others complained about having to pay a higher gas fee than the actual transaction.

try to buy a ~$20 NFT on eth, and the gas is ~$40.
some ppl say the infra operators deserve to be paid. sure, but imaging paying visa $40 fee for buying a $20 digital good.. infra should be affordable. pic.twitter.com/5L4SYjT5af
— 0xMQQ (@0xMQQ) April 18, 2023

Another prominent reason for the soaring gas fees was blamed on a Maximal Extractable Value (MEV) trading bot that is front-running memecoin trades on a massive scale. The bot in question jaredfromsubway.eth has been the top gas spender in the last 24 hours, spending 455 ETH ($950,000) and using 7% of the total gas of the network.

In the last two months, it spent more than 3,720 ETH ($7 million) in gas fees and performed more than 180,000 transactions.

bro has used 7% of the total gas on ethereum over the past 24hrs (455 ETH) just feasting away on $pepe

data from the legendary @hildobby_ https://t.co/j3SqtQnkKJ pic.twitter.com/hWavtdO1D5
— beetle (@1kbeetlejuice) April 18, 2023

The Subway-themed bot is using the sandwich trading technique to pocket millions of dollars while congesting the network at the same time.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide

NYDFS adopts regulation to assess supervisory costs for licensed crypto firms

April 17, 2023 Coin Telegraph

BitLicense

Since 2015, crypto firms operating in the state of New York have largely been required to apply for a BitLicense to offer services.

The New York State Department of Financial Services, or NYDFS, has adopted a regulation that will allow the government agency to assess supervisory costs from licensed crypto firms operating in the state.

In an April 16 announcement, the NYDFS said the supervisory costs enforced by the new regulation would be used for “adding top talent to its virtual currency team”. The government department will assess costs for the supervision and examination of crypto firms operating in the state with a BitLicense.

“This regulation provides the Department with additional tools and resources to regulate the virtual currency industry now and in the future as innovators create new products and use cases for digital assets,” said NYDFS Superintendent Adrienne Harris.

#ICYMI: DFS Superintendent Adrienne A. Harris Announces Adoption of Virtual Currency Assessment Regulation: https://t.co/6W5ShsYjEx pic.twitter.com/xcevSyw2O9
— NYDFS (@NYDFS) April 17, 2023

Crypto firms operating in the state of New York are largely required to apply for a BitLicense, a requirement for companies since 2015. The NYDFS proposed adopting the regulation to assess costs in December 2022, after which time it met with “key stakeholders” and received feedback. According to the regulator, the proposed rule was added in response to the state’s Financial Services Law not including such a provision on the assessment of operating costs.

The NYDFS listed 33 companies involved in crypto and blockchain operating in the state under a virtual currency license, limited purpose trust charter, or money transmitter license as of Feb. 10. New York City Mayor Eric Adams suggested the state scrap the BitLicense regime in April 2022, claiming the requirements stifled innovation and economic growth.

Magazine: Crypto City: Guide to New York

Coinbase CEO says Bitcoin Lightning is ‘something we’ll integrate’

April 10, 2023 Coin Telegraph

BASE

“Lightning is great and something we’ll integrate,” Armstrong said in response to an allegation that he was “ignoring” the network.

Bitcoin (BTC) layer 2 scaling solution Lightning may feature on the cryptocurrency exchange Coinbase in some capacity, according to its chief Brian Armstrong.

In a tweet on April 8, Armstrong said that “Lightning is great and something we’ll integrate” in response to a tweet criticizing him for “actively ignoring” the network.

My tweets auto-delete after some number of months, so there is no search history.

Lightning is great and something we’ll integrate.
— Brian Armstrong (@brian_armstrong) April 8, 2023

Armstrong provided no further details on what a Lightning integration with Coinbase would involve or when it could be expected.

Coinbase, along with Binance and the now bankrupt FTX, has been called out in the past for not integrating the Lightning network which enables faster and cheaper BTC transactions than the Bitcoin base network.

According to a GitHub repository by Lightning enthusiast David Coen, Coinbase would join Bitfinex, Kraken and OKX as the largest trading platforms to have integrated Lightning, if Armstrong stays true to his word.

Coen had previously suggested that Lightning integration may go against the business plan for many of these trading platforms, “since the priority seems to be to integrate as many altcoins as possible and follow the trends of the market.”

Armstrong claims to have tested out a Lightning network application in recent days, and sent Cointelegraph reporter Joseph Hall $100 in BTC after Hall shared a video of himself using Bitcoin in Senegal.

The $100 was a prize by Armstrong for those who shared the “best” examples of how people are using crypto in Africa. Hall said he would give away the funds to onboard others to Bitcoin.

Here is a video of me using #Bitcoin in Africa

I used #lightning for instant, free payments. Does Coinbase Wallet have lightning? ⚡️

#BitcoinAfrica > #CryptoAfrica pic.twitter.com/1Syz71swR4
— Joe Nakamoto (@JoeNakamoto) April 7, 2023

Hall reported, however, that he hasn’t received the payment, prompting Bitcoiner Derek Ross to suggest that Armstrong “needs a lesson on Lightning.”

Coinbase has lately been more active in the Ethereum ecosystem having launched “Base” on Feb 23 — an Ethereum layer 2 application-focused network powered by fellow layer 2 Optimism.

Interestingly, Armstrong wrote a “Scaling Bitcoin” article in January 2016, where he said that he would throw support behind Bitcoin scaling solutions:

“We also did it to show our support for scaling Bitcoin, and encourage things to move forward, since we’d like to see a solution sooner rather than later.”

Lightning was launched about two years later in March 2018, with last month marking the fifth anniversary of the network.

Cointelegraph contacted Coinbase for comment but did not receive an immediate response.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

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Ethereum projects unite to protect users from MEV-induced high prices

April 5, 2023 Coin Telegraph

Coin Telegraph

In total, 27 Ethereum projects joined the initiative as launch partners, which includes Balancer, Gnosis DAO, Shapeshift, and StakeDAO, to name a few.

Over 27 prominent Ethereum projects joined hands to launch MEV Blocker, a solution that aims to tackle and minimize the amount of value extracted from their users, a.k.a maximally extractable value (MEV) — Ethereum’s invisible tax.

MEV is a tax imposed on decentralized finance (DeFi) users on transactions. MEV bots can hijack transactions midway, such as Ether (ETH) trades, nonfungible token (NFT) purchases and ENS registrations, and inflate prices for the users. MEV Blocker was jointly developed by CoW Swap, Agnostic Relay and Beaver Build as a free and censorship-resistant tool to counter this “$1.3 billion dollar problem” persistent across the Ethereum ecosystem.

In total, 27 Ethereum projects joined the initiative as launch partners, which includes Balancer, Gnosis DAO, Shapeshift, and StakeDAO, to name a few. Explaining the intention behind launching MEV Blocker, Martin Köppelmann, CEO of Gnosis stated:

“With the launch of MEV Blocker, users can profit from the backrunning opportunities they create. Today all of that money is taken by the searcher, but why shouldn't it be split with the people who create the value?”

MEV Blocker can be added as a custom RPC endpoint to a crypto wallet, which, in turn, can protect users from frontrunning and sandwiching when using any Ethereum DApp. According to the official announcement, MEV Blocker sends at least 90% of the profits from winning bids back to users and 10% to validators as a reward — thus giving “power back to Ethereum users.”

While entrepreneurs attempt to reduce the taxation on users, the excitement around the upcoming Shanghai and Capella upgrades resulted in a bull sprint for ETH.

Alright, let's talk about the Ethereum Shanghai Upgrade! It's a hard fork scheduled to occur in March 2023. Stakers and validators will be able to withdraw staked ETH from the Beacon Chain. Approximately 16 million staked ETH will be available for withdrawal.
— Branimir Stojanović (@branelost) April 4, 2023

On April 5, Ether breached $1,900 for the first time in over seven months. However, it is important to note that the price of ETH dropped sharply following the execution of the Merge on Sept. 15, 2022.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide

PancakeSwap changes its recipe with the launch of Version 3

April 3, 2023 Coin Telegraph

Automated Market Maker

PancakeSwap has released version 3 of its BNB Chain, Aptos and Ethereum-based DeFi platform, touting improved performance and lower fees.

Decentralized finance (DeFi) protocol PancakeSwap has launched version 3 of its automated market maker platform on BNB Chain and Ethereum, with the upgrade encompassing performance improvements and lower fees.

Enhanced capital efficiency is cited as a key aspect of the upgrade, with a change in how liquidity providers can allocate capital on specific price intervals. In the previous version of PancakeSwap, liquidity from providers (LPs) was distributed uniformly along the price curve of trading pairs, which the platform notes was inefficient given that assets typically trade within certain ranges.

V3 allows liquidity providers to select a custom price range to provide liquidity, allowing specific control over capital investments to higher volume trading ranges. The release also touts the provision of four new trading fee tiers from 0.01%, 0.05%, 0.25%, and 1%, which is a change from V2’s standard 0.25%.

Every token pair can have liquidity pools for each tier. PancakeSwap expects asset pairs to be drawn to tiers where incentives for LPs and traders align, with the approach an effort to balance between traders targeting the lowest fees while still incentivizing LPs.

The PancakeSwap team unpacked the different trading fee tiers in correspondence with Cointelegraph. Assets such as stable pairs where impermanent loss is low (price changes after depositing to a liquidity pool) and prices typically match fall into the 0.01% tier.

The higher percentage trading fee tiers cater to assets that have higher impermanent loss or lower liquidity. This mechanism intends to provide more fee revenue and incentive for LPs.

PancakeSwap caters to a broad DeFi user base, accounting for over $2.5 billion of total value locked and serving over 1.5 million unique users.

The platform also revealed upcoming features that are still in development, including a trading rewards program incentivizing traders with exclusive benefits, while a position manager feature aims to improve user experience when depositing tokens as liquidity.

Arbitrum (ARB) has been front and center in DeFi-related news in March, with its highly-anticipated airdrop seeing around $3.3 million consolidated from over 1,400 addresses into two controlling wallets.

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Fees