- Vitalik Buterin made headlines at TOKEN2049 in Singapore by announcing that the fees for Ethereum’s layer-2 solutions have effectively reached zero.
- The speed of Ethereum transactions has significantly improved, with confirmation times now ranging from 5 to 15 seconds following the Merge upgrade.
- Despite these advancements, Ether continues to lag behind Bitcoin, experiencing $581 million in outflows from ETFs, which has negatively impacted its price.
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Vitalik Buterin, the founder of Ethereum, who is often characterized by his introverted and somewhat unconventional demeanor, surprised attendees at Singapore 2049 by delivering his address in the format of a concert, during which he performed songs that highlighted the most recent developments and articulated his aspirations for the ecosystem.
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Even though it was entertaining, Vitalik did reveal some important details. While cryptocurrency fans sat enthralled, he concentrated on the effects of Ethereum’s Layer-2 networks, notably Optimism and Arbitrum.
“Transaction speeds are faster and fees are lower.”
Vitalik highlighted that transaction fees, which were previously a significant obstacle to widespread adoption, have now been reduced to nearly zero on Layer-2 networks, decreasing from a range of $10 to $0.50 per transaction. He noted that Ethereum’s gas fees had previously soared to as high as $200 during periods of network congestion, an issue that Layer-2 solutions are effectively addressing.
The implementation of these networks has enhanced both the scalability and affordability of Ethereum. Vitalik reminisced about a time when he incurred over $800 in gas fees for a single privacy-focused transaction, a scenario that has become obsolete due to the progress made by Layer-2 networks.
In addition to the reduction in fees, the confirmation times for Ethereum transactions have seen substantial improvements following the transition to a proof-of-stake model in September 2022, after the Merge. Vitalik elaborated that the waiting period for transaction confirmations has been halved, with transactions now being confirmed in as little as 5 to 15 seconds.
Vitalik emphasized the importance of addressing the requirements for widespread adoption while simultaneously upholding the values of open-source technology and decentralization. He highlighted the necessity for the cryptocurrency community to adopt a pragmatic approach.
Furthermore, he called upon industry participants to maintain a focus on practicality, ensuring that the fundamental principles of the sector are not compromised in the pursuit of progress. This balance is crucial for the sustainable growth of the cryptocurrency ecosystem.
Ethereum is still having trouble.
Vitalik Buterin addressed the ongoing rivalry between Ethereum and Bitcoin, noting that Bitcoin currently holds a market dominance of 58%. This competitive landscape highlights the contrasting trajectories of the two cryptocurrencies, with Bitcoin exhibiting a degree of stability while Ethereum has struggled to maintain a price above $2,500 for an extended period.
Since its inception, Ethereum has experienced a net outflow of $581 million in Ether, a concerning trend for the platform. Notably, Grayscale has been a significant contributor to this outflow, accounting for approximately $2.7 billion. This financial movement raises questions about investor confidence and the overall health of the Ethereum ecosystem.
Additionally, there has been a noticeable decline in the activity of decentralized applications (DApps) on the Ethereum network, which has dropped by 19% on a weekly basis. In contrast, rival blockchain platforms such as Solana and BNB Chain have reported growth in their DApp activities, with increases of 24% and 23%, respectively. This shift in user engagement underscores the competitive pressures facing Ethereum in the broader blockchain landscape.
On September 17, the price of ETH encountered a significant technical barrier, finding it difficult to surpass the 20-day Exponential Moving Average (EMA) set at $2,397. Despite the efforts made by bullish traders, they were unable to achieve a breakthrough at this critical level.
Should the current support level fail to hold, there is a risk that Ether may experience a decline, potentially dropping to $2,111 or even reaching as low as $2,000. This scenario underscores the importance of maintaining robust support to prevent further downward movement in the price.
Conversely, if bullish momentum can successfully elevate the price above the 50-day Simple Moving Average (SMA) at $2,553, there is a possibility for Ether to experience a rally, potentially reaching $2,850 and, in an optimistic scenario, even approaching the $3,000 mark. This highlights the dynamic nature of market movements and the potential for significant price fluctuations.
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