The use of the Ethereum blockchain has seen a significant upswing in recent months. The reason for this is easy to see. DeFi projects attract investors and create a hype. There are not only advantages to this. The transaction costs increase due to the increased transaction volume.
The whole thing works at Ethereum similar to Bitcoin. Transactions with higher fees are mined faster. Because the miners collect the transaction costs, they prefer transactions with high fees. This is how a market is created. If the demand is high, the price rises and vice versa.
Ethereum has its own concept for this, the so-called gas. You can read exactly how this works in the following article.
Which DApps are responsible for the increase?
Gas costs have risen steadily over the past few months. Especially strong in the last few days.
The DApps that use the blockchain the most in the last few days have been DeFi projects, above all Uniswap. But also others like Aave, Synthetix, 1Inch or the oracle provider Nest had high transaction figures. Furthermore, fraud systems like the MLM-Ponzis Foresage or Lion Share are unfortunately at the forefront here.
The gas price peaked on Wednesday when many investors turned to the YAM Hype jumped and made many transactions for staking or borrowing and staking the tokens. Users complained of long waiting times and transaction costs of up to $ 50 in some cases. In the past 30 days, the blockchain is said to have gobbled up gas worth $ 4.6 million.
Ethereum is mutating more and more into a gamer blockchain
DeFi, can currently more or less only be used for speculation, as the pledge must have more value than the loaned loan. Traders use DeFi mainly to short the borrowed cryptocurrencies. In addition to the fraud systems, users also invest hysterically in systems where they hope to make a quick profit, such as YAM z. B.
So the platform is still mainly a vehicle for gambling and a quick scoop (if you are successful). Other DApps fall by the wayside because of the high transaction costs with no prospect of profits or their use does not pay off.
What’s next?
Ethereum has scaling solutions such as zkrollups z. B., but these are still in their infancy. With Ethereum 2.0 one would like to increase the scalability, but that can drag on for months or years. DApp developers will probably look around for other platforms. EOS z. B. does not use gas, network resources are reserved there, which makes the transaction costs more predictable.
All in all, one can say that blockchain still has a long way to go before it can operate sustainable DApps with millions of users. The next few years will show whether the problem can be solved or alleviated. Particularly interesting in this regard is how Reddit is just looking for scaling solutions for Rating System seeks, solves the problem.
In order to support and motivate the CryptoTicker team, especially in times of Corona, to continue delivering good content, we would like to ask you to donate a small contribution. Independent journalism can only survive if we stick together as a society. We thank you!
–
Nexo – your crypto bank account
Crypto instant loans from only 5.9% interest per year. Earn up to 8% interest per year with your stablecoins, USD & GBP. $ 100 million deposit insurance.
–
Ad
–
–
This post may contain promotional links that help us finance the website. When you click on the links, we receive a commission – but the prices do not change for you! 🙂
Also note ours Disclaimer of liability.
If you are considering opening an account with a CFD provider, you should know that CFDs are complex financial instruments that, through leverage, involve a high risk of losing money quickly. Most retail investor accounts lose money when trading CFDs.
–
–
Posted By
Lukas Mantinger
Lukas is a journalist and specialist in the blockchain area. He has been dealing with the subject for many years, writing reports and reports on a daily basis. He is always up to date and, above all, an expert when it comes to technical questions.
–
–
–
You might also like
More from Analysen
–
Blockchain oracles are booming! Are we in an oracle hype?
Posted On August 12, 2020
Lukas Mantinger0
–
To correct the title right from the start, it is not the oracles themselves, the booms, but the prices of their tokens. …
–
–
–
–
–
–
The 5 most expensive cryptocurrencies in the top 100
Posted On August 10, 2020
Lukas Mantinger0
–
Coingecko normally lists the cryptocurrencies according to their market capitalization, i.e. the price multiplied by the amount in circulation. Today we look at …
–
–
–
–
–
–
The top 5 cryptocurrencies of the week (week 32)!
Posted On August 9, 2020
Lukas Mantinger0
–
The Bitcoin price was able to hold its own in the $ 11,000 to $ 12,000 range after the sharp rise 2 weeks ago. From …
–
–
–
–
–
–
–
