A prominent market intelligence firm says that Ethereum’s (ETH) gas fees have dropped to levels not seen since the crypto markets collapsed in May of 2021. In a new report, Santiment says that the depressed gas fees on Ethereum suggests that interest in using the leading smart contract platform have significantly declined. “Ethereum fees are […]
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“Ethereum’s overwhelming mindshare helps explain why its users have been willing to pay more than $15 million in fees per day on average just to use the blockchain,” a16z stated.
Crypto venture fund giant Andreessen Horowitz (a16z) has highlighted that development and demand on Ethereum is “unmatched” despite the network’s high transaction fees.
The firm does warn, however, that its “popularity is also a double-edged sword” given Ethereum prioritizes decentralization over scaling, resulting in competing blockchains stealing market share with “promises of better performance and lower fees.”
The comments came via a blog post introducing a16z’s 2022 “State of Crypto” report, with the firm’s data scientist Daren Matsuoka, head of protocol design and engineering Eddy Lazzarin, General Partner Chris Dixon, and head of content Robert Hackett all working together to provide five key takeaways from the study.
Outside of Ethereum, the report focuses on topics such as Web3 development, crypto adoption rates, decentralized finance (DeFi) and stablecoins.
Introducing a16z’s 2022 State of Crypto Report
— a16z (@a16z) May 17, 2022
A lot has changed since we started investing in crypto nearly a decade ago.
Here are 5 key takeaways from the a16z crypto web3 industry survey and data analysis by @darenmatsuoka, @eddylazzarin, @cdixon & @rhhackett ⬇️ pic.twitter.com/JFLXbNh03u
According to data from the report, Ethereum towers over the competition in terms of builder interest, as the network has around 4,000 active monthly developers compared to second-ranked Solana (SOL) at 1,000. Bitcoin (BTC) and Cardano (ADA) are next in line at roughly 500 and 400 apiece.
The analysts noted that “Ethereum’s lead has much to do with its early start, and, the health of its community” but emphasized the significance of development continuing to surge on the network despite high transaction costs:
“Ethereum’s overwhelming mindshare helps explain why its users have been willing to pay more than $15 million in fees per day on average just to use the blockchain — remarkable for such a young project.”
The demand for Ethereum can also be seen across the report’s estimated transaction fees paid on a blockchain over a seven-day average (calculated as of May 12), with the data showing that Ethereum accounts for $15.24 million. To provide contrast, BNB Chain, Avalanche, Fantom, Polygon and Solana account for roughly $2.5 million worth of fees combined.
The report notes that Layer-2 scaling solutions are fighting to bring Ethereum’s fees down and transaction speeds up, while also pointing out that long-awaited upgrades are coming to Ethereum to make the network more efficient and cost-effective.
The "long awaited" upgrades can't happen soon enough however and a16z also highlighted in the report that over a 30-day average (as of May 12), active addresses and transactions on competing blockchains including Solana, BNB Chain and Polygon are already well ahead of Ethereum.
Related: Ethereum analytics firm Nansen acquires DeFi tracker Ape Board
The data shows that Ethereum has 5.5 million active addresses that account for 1.1 million daily transactions, while Solana has a mammoth 15.4 million active addresses and 15.3 million daily transactions. BNB Chain ranks in third with 9.4 million and 5 million, while Polygon totaled around 2.6 million and 3.4 million. The analysts concluded it won't be a winner-takes-all situation.
“Blockchains are the hit product of a new computing wave, just as PCs and broadband were in the ‘90s and 2000s, and as mobile phones were in the last decade. There’s a lot of room for innovation, and we believe there will be multiple winners.”
Other key takeaways from the report included the DeFi sector’s total value locked of roughly $113 billion would make it 31st largest bank in the U.S., estimations that Web3 adoption could hit 1 billion users by 2031 and that NFTs have generated $3.9 billion worth of revenue for creators so far.
MATIC has rebounded sharply after testing the July 2021 support level, borrowing further upside cues from Polygon's partnership with Meta.
Polygon (MATIC) price reversed course to the upside on May 10 after testing $0.794 as its interim support, thus rising by up to 25% to $0.99.
The rebound occurred a day after the token slumped over 17% to reach $0.787, its lowest level since July 2021, amid a global market crash led by the U.S. Federal Reserve's hawkish policies.
MATIC price rebounded after undergoing five days of relentless declines, attracting buyers around the same support level that had preceded a 275% bull run last year.
A previous retest of the $0.787-level in July 2021 and the 0.786 Fib line (near $0.61) of the Fibonacci retracement graph — drawn from the $0.002-swing low to 2.86-swing high — followed up with MATIC rising to its record high of $3 by December 2021.
Therefore, MATIC/USD might undergo a similar, sharp upside retracement in the coming weeks after rebounding from the same support confluence.
However, a lot has changed in terms of market fundamentals between July 2021 and May 2022 that may influence MATIC traders' behavior.
For instance, MATIC's price boom occurred last year as demand for layer-2 solutions increased due to Ethereum's skyrocketing gas and transaction costs.
As a result, popular decentralized finance (DeFI) applications, including decentralized exchange SushiSwap (SUSHI), liquidity service Curve (CRV), and lending platform Aave (AAVE), expanded their operations in the Polygon chain.
But 2022 has been a bad year for cryptos. The Fed's decision to hike interest rates followed by the unwinding of their $9 trillion balance sheet has prompted investors to reduce their exposures to riskier assets. Unfortunately, the prospect of excess cash leaving the market has hurt MATIC, whose year-to-date paper returns were nearly 65% below zero as of May 10.
Unfortunately, the prospect of excess cash leaving the market has hurt MATIC, whose year-to-date paper returns were nearly 65% below zero as of May 10.
Related: 10-month BTC price lows spark $1B liquidation as Bitcoin eyes $35K CME futures gap
"This is a risk-off across all asset classes, including crypto,” Daniel Ives, strategist at Wedbush Securities, told the Financial Times, adding that digital asset investors have “nowhere to hide.” He added:
"Some investors are playing crypto like a hedge against inflation, but it’s trading like the Nasdaq’s Siamese twin."
On May 9, Polygon CEO Ryan Watt announced that they are partnering with Meta to create a nonfungible token (NFT) platform for Facebook and Instagram.
Meta CEO Mark Zuckerberg also confirmed that they have been "testing digital collectibles for creators and collectors to showcase NFTs on Instagram," adding that similar features would come to Facebook soon. The hype could help MATIC form a strong price floor.
Massive.
— Michaël van de Poppe (@CryptoMichNL) May 9, 2022
But from a technical perspective, MATIC risks bearish continuation toward $0.615 in May.
Meanwhile, a bullish confirmation looks less likely to appear unless the token reclaims its 50-week exponential moving average (50-week EMA; the red wave) near $1.37 as support.
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.
Otherdeed NFTs top the “burn leaderboard” over the past seven days at roughly 55,816 ETH or 56% of all burns during that period.
The burning rate of Ethereum (ETH) has spiked to new all-time high (ATH) levels following the heavily anticipated sale of tokenized land plots in Yuga Labs’ upcoming Metaverse project the “Otherside.”
Yuga Labs, the creators of the Bored Ape Yacht Club (BAYC) sold 55,000 virtual land NFTs dubbed “Otherdeeds” on May 1. The overwhelming demand for the tokens saw Ethereum gas fees shoot up so high that a handful of users paid as high as 2.6 ETH ($7,400) to 5 ETH ($14,270) just to get their transactions through.
A base fee of ETH is burned during each transaction on the network following the implementation of the London hard fork or EIP 1559 upgrade last year.
According to data compiled from Glassnode and Data Always, nearly 70,000 ETH was burned on May 1, which is more than triple the previous ATH of around 20,000 in mid-January.
This is approximating the rest of the day as normal burn. We could easily see the number go above 70k as other transactions need to catch up on missed blockspace. It's just incomparable to anything we've seen before.
— T. | dataalways.eth (@Data_Always) May 1, 2022
Data from Ultrasound.Money shows that since the integration of EIP 1559 on August 5, 2021, the average burn rate has been 5.81 ETH per minute.
However, amid the Otherdeed NFT sale, that figure jumped to 9.83 ETH per minute for a total of 99,084.65 ETH over the past seven days. Since then the burn rate has dropped back down to around 3.9 ETH per minute.
Related: Ethereum gas fees drop to lowest levels since August 2021
While other platforms and projects accounted for this figure, it's notable that Otherdeed NFTs top the “burn leaderboard” over the past seven days at roughly 55,817 ETH or 56% of all burns during that period. This figure is significantly ahead of second-placed OpenSea at 7,152 ETH.
With the demand for the sale temporarily overwhelming the Ethereum network, and many users losing funds on gas fees for failed ETH transactions, Yuga Labs has outlined intentions to build a blockchain and port its BAYC affiliated ApeCoin over.
In a Twitter post yesterday, Yuga Labs stated that it will be refunding user’s gas fees, and noted that:
“We're sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale. We'd like to encourage the DAO to start thinking in this direction.”
According to the startup Starkware, the team’s Ethereum layer two (L2) service Starknet has been integrated by the blockchain API and node service Alchemy. Developers can now leverage Alchemy’s infrastructure tools alongside Starknet’s zero-knowledge (ZK) rollup technology. Israel-Based Startup Starkware Partners With Alchemy On Monday, the blockchain startup Starkware announced the team has inked a […]
The floor price of Lana Rhoades NFT project has dropped 96.1% while a 24/7 Solana NFT vending machine was officially launched in New York this week.
An anonymous nonfungible token (NFT) collector spent 204 Ether (ETH) worth roughly $488,800 (at the time of writing, considerably more when it occurred) on gas fees to mint 1,000 Tubby Cats NFTs.
In total, the Tubby Cats enthusiast clearly had some capital to burn as they spent more than $720,000 on minting the NFTs including gas fees, according to the Etherscan transaction history.
Following the mint of 1000 NFTs, and with Tubby Cats invading Nifty Twitter timelines, it appears that the community has turned the occurrence into a meme, as various figures have claimed to be Tubby Cat whales in jest.
found it, also not hating! congrats to all who minted. https://t.co/zjL81c0W7I
— Dallasjhawk.eth (@dallasjhawk) February 23, 2022
The project consists of 20,000 NFTs depicting unique computer-generated cat avatars. According to data from NFT marketplace OpenSea, Tubby Cats NFTs have generated 11,600 Ether ($27.7 million) worth of trading volume in just three days since listing on the platform.
We may be going to war but at least I got my tubby @tubbycatsnft pic.twitter.com/KTsPYe3b3E
— cam () (@camallen_) February 24, 2022
Web3 gaming startup Fast Break Labs has closed a $6 million seed funding round to launch an NFT-based fantasy basketball game dubbed the “Virtual Basketball Association” (VBA)
According to a Feb. 23 announcement, the seed round was co-led by Patron and Pantera Capital and included backing from a long list of top names such as Solana Ventures, Blue Pool Capital (the family office of Brooklyn Nets owner Joe Tsai), Riot Games co-founder Marc Merill and Sacramento Kings Co-Owner Aneel Ranadive, to name a few.
The game is slated to launch via an early alpha for 2,000 users, who will have a chance to collect fictional player NFTs and build teams for season 0. Users will be able to earn rewards from the game via player vs player simulated team battles.
"While we're primarily focused on creating a new and fun experience, it was also really important to us to give power back to gamers by allowing them to shape the direction of the game and accrue the economic benefits," said Charles Du, the CEO and co-founder of Fast Break Labs.
Solana-based NFT marketplace Neon unveiled a 24/7 NFT vending machine in New York’s financial district on Feb. 23.
The vending machine was soft-launched back in December but is now officially rolled out and accepts credit and debit card payments. After payment, it dispenses a box containing a unique code that can be used to redeem an NFT listed on the platform.
The firm stated that the vending machine was designed to provide the “simplest, most accessible way to buy, sell and trade NFTs in the real world.”
Speaking as part of the announcement, CMO and co-founder of Neon Jordan Birnholtz emphasized the importance of providing a user-friendly buying experience as a way to remove a barrier to crypto:
“Giving people the choice to use vending machines and an easy online platform that decouples cryptocurrency from NFT participation means we can engage the widest possible audience.”
“NFT buying and selling doesn’t need to be a mystery and you shouldn’t be required to hold Ethereum, write a smart contract, pay gas costs or bridge blockchains to participate,” he added.
The floor price of NFTs from the project founded by popular influencer and pornstar Lana Rhoades has crashed an eye-watering 96.1%.
Rhoades’ CryptoSis NFT collection consists of 6,969 tokens that feature cartoon style depictions of the influencer. The cost to mint plus gas fees totaled 0.18 Ether worth roughly $421, however, the floor price has since crashed to 0.007 Ether ($16) on OpenSea.
The community appears to be unhappy with Rhoades and team behind the project, as Twitter user “Zachxbt” highlighted on Twitter earlier this month that:
“Another dead influencer project. No activity from the team in weeks, roadmap untouched, majority of the funds raised transferred to Coinbase/Gemini.”
@lanarhoades why you delete all your TikTok vids promoting NFT
— TikTok Investors (@TikTokInvestors) February 11, 2022
The project is said to have raised around $1.8 million in profit, and some have questioned why Rhoades deleted their promotional Tik Tok videos about the project since it has gone cold.
New data shows that transfers of NFTs on Ethereum have surpassed transfers of stablecoins and altcoins while the supply of wrapped Bitcoin (WBTC) has remained relatively stagnant since late last year.
Puma joined the growing list of major brands to purchase a decentralized URL and reveal their NFT plans by changing their Twitter handle to Puma.eth on Feb. 22. The German sportswear brand registered the domain name with the Ethereum Name Service.
Calculating different gas prices for different resource usage may streamline the current fee structure for Ethereum according to Buterin.
Ethereum co-founder Vitalik Buterin has put his thinking cap on again in an attempt to improve the current fee structure for the network.
The proposal titled “Multidimensional EIP-1559” was laid out in a blog post on Jan. 5 in which Buterin noted that different resources in the Ethereum Virtual Machine (EVM) have different demands in terms of gas usage.
He added that there are different limits for short-term “burst” capacity as opposed to “sustained” capacity within the EVM citing examples of block data storage, witness data storage, and block state size changes.
“The scheme we have today, where all resources are combined together into a single multidimensional resource ('gas'), does a poor job at handling these differences.”
The problem is that channeling all the different resources into a single one leads to “very sub-optimal gas costs” when these limits are misaligned, he added.
Buterin outlined his fairly complicated proposed changes with a lot of technical math, but in a nutshell, the proposal offered two potential solutions using “multidimensional” pricing.
The first option would calculate the gas cost for resources such as call data and storage by dividing the base fee for each unit of resource by the total base fee. The base fee is a fixed-per-block network fee included in the EIP-1559 algorithm.
The second more complex option sets a base fee for using resources but includes burst limits on each resource. There would also be “priority fees” which are set as a percentage and calculated by multiplying the percentage by the base fee.
He stated that the drawback to the multidimensional fee structure is that “block builders would not be able to simply accept transactions in high-to-low order of fee-per-gas.” They would have to balance the dimensions and solve additional mathematical problems.
Related: Ethereum supply flips briefly into deflation as gas fees spike
It remains to be seen whether the proposal will be passed since the priority at the moment is the next big upgrade. The Ethereum network is currently gearing up for “the merge” which will dock the Ethereum blockchain with the Beacon Chain and effectively end Proof-of-Work. Testing is already occurring on the Kintsugi testnet and full deployment is expected in the first quarter of this year.
EIP-1559 was deployed in August as part of the London upgrade to burn a portion of the transaction fees in order to make gas pricing more predictable. Since it went live, 1.36 million ETH worth approximately $4.7 billion at current prices has been destroyed according to the burn tracker.
