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Uniswap’s UNI Becomes a Top 10 DeFi Token After a Day, Driving Ethereum Transaction Fees to an All-Time High

Uniswap recently launched its own governance token UNI, and since its launch, Ethereum’s transaction fees have reached new highs. Within hours after the launch of the UNI token, Uniswap became one of the most valuable projects in the DeFi sector.

As users were in a rush to claim Uniswap tokens allocated to them, the Ethereum network faced massive congestion. This resulted in a spike in transaction fees on the Ethereum network, reaching a record high. Uniswap accounted for 35% of the total gas consumption in the past 24 hours, where gas prices were recorded as high as 700 gwei. Average gas prices are around 416 gwei, and according to Etherscan, 422 gwei is already considered high.

According to data from crypto analytics firm Glassnode, the total amount of miner fees recorded spike from $100,000 to $900,000 in less than an hour. With Ethereum’s fees shooting up, Ryan Watkins, research analyst at Messari said, “Ethereum is damn near unusable right now. I can only imagine what retail will think if they eventually come into this market and face $50+ gas fees and 10+ minutes transaction confirmations.” He added:

“This has been my biggest anxiety about this bull market. The protocols are ready, the infrastructure is not.”

Watkins believes that with Ethereum’s high transaction fees, it could be detrimental to the growth of the DeFi and crypto space in the long run. Ethereum’s high transaction fees may hinder the bull market, as the majority of retail users may get edged out of the market, leaving the whales to dominate.

Uniswap becomes the largest DeFi protocol

Uniswap recently became the largest DeFi protocol in terms of total value locked (TVL), taking up $1.4 billion in cryptocurrencies, according to DeFi Pulse. The UNI token also became the top-45 ranked crypto by market cap, according to CoinGecko, within 24 hours of trading. The UNI token has also been ranked in the top 10 DeFi tokens.

The UNI token has also been listed on crypto exchanges, including Coinbase Pro. Prior to Coinbase Pro’s announcement, Binance had already announced that it will list UNI token and open trading for UNI/BTC, UNI/BNB, UNI/BUSD, and UNI/USDT trading pairs. The exchanges are moving fast given that the UNI token was only launched by Uniswap earlier on the same day.

ETH Price Plunges as Ethereum Gas Fees Make DeFi Unusable

The crypto market sharply plunged yesterday with Bitcoin dropping over 17% to under $48,000 and Ethereum falling to $1,580.63 from a 24 hour high of $1,918.19 according to CoinMarketCap.

Ethereum’s surging gas fees continue to raise concern—making decentralized finance (DeFi) all but unusable for the average trader. During the correction yesterday it was DeFi tokens and altcoins that suffered the most during the sell-off.

Ethereum gas fees have hit an all-time high—with an average transaction fee of over $30 USD, making DeFi almost entirely unusable for the majority of retail traders. On popular exchange Kraken, Ethereum price fell over 60% to $750 last night with many traders now asking if it’s time to jump-ship and panic?

In a note to Blockchain.News, Kosala Hemachandra, Founder/CEO of MyEtherWallet (MEW) said that traders should remain calm and remember why gas prices exist in Ethereum in the first place, he says:

“There are problems with high gas fees on Ethereum now, but we must remember that gas prices are meant to balance the number of transactions that can happen at any given time. They have the purpose of a safeguard, making sure the infrastructure doesn’t break.”

Hemachandra explained that these issues exist in Ethereum and not Bitcoin due to the high number of use cases in DeFi. He said:

“With Bitcoin, for example, you are only transferring a large quantity of value around, one transaction fee at a time. Ethereum has a use case behind it, the decentralized applications, that causes the need for frequent transactions, which elevates those gas prices.”

The MEW founder is asking trader’s not to panic as he affirms these issues will not be a problem forever adding:

“Good news is that developers on Ethereum already have Layer 2 solutions like Loopring, Skale and more launching on mainnet soon. Ethereum was always planning to go to a PoS system, so it can only go up from.”

Paolo Ardoino, CTO at Bitfinex explained to Blockchain.News that the market is still nascent and price volatility is to be expected and those who are merely focused on the price and not the development of technologies like Bitcoin and Ethereum are entirely missing the point. He explained:

“Today’s drop may seem to be a correction in BTC while a sharp dip in Ethereum’s price has put the focus upon increasing transaction fees in ETH. Today’s price movement may galvanize bitcoin’s many critics, including those who recently dismissed the leading cryptocurrency as an economic sideshow. Such criticism misses the point and the profound impact it is starting to have. For many of the battle-tested exchanges that have weathered the market fluctuations, volatility isn’t new and is to be expected in such a young market. For many in the industry, development and deployment is priority. Price movements are more of a sideshow.”

At the time of writing Bitcoin’s price has recovered 10% to $52,658.83 while Ethereum’s price has regained above the $1700 level—still hovering far below its all-time high of $2040.

Crypto Wallets Holding at least 1 Ethereum Hit a Monthly High Despite Price Correction

Ethereum (ETH) achieved a new milestone by surging past $2,000 across major exchanges over the weekend. Nevertheless, a pullback was imminent. The cryptocurrency has slumped by 22% in the past 24 hours to trade at $1,452 at the time of writing, according to CoinMarketCap.

New data by on-chain data provider Glassnode reveals that despite this price correction, Ethereum addresses holding more than 1 ETH have hit a monthly high of 1,175,408.

The second-largest cryptocurrency has been enjoying a remarkable bull run as crypto whales have been showing interest in Ethereum because addresses holding more than $10,000 ETH ballooned to1,287 on Valentine’s Day.

High ETH Gas fees are triggering a price plunge

In spite of the upward trek that Ethereum has been enjoying recently, its present price plunge is attributed to high gas fees, which are making decentralized finance (DeFi) unusable for the average trader.

ETH gas fees have hit an all-time high—with an average transaction fee of over $30, making DeFi almost entirely impractical for the majority of retail traders. DeFi, together with the launch of Ethereum 2.0, has been the driving force behind ETH’s bull run as the latter seeks to offer a proof-of-stake consensus mechanism, a transition from the current proof-of-work protocol.

By making DeFi unattractive because of high transaction fees, Ethereum has experienced the repercussions, as evidenced by its nosediving price. Prior to this pullback, the total revenue in DeFi had surged to $800 million this month.

Despite the current price correction, crypto trader Michael van de Poppe believes that Ethereum is still undervalued compared to Bitcoin. He noted:

“Ethereum is approaching levels where I’m interested in, as I suspect ETH is still undervalued compared to BTC.”

Time will tell whether the high Ethereum gas fees will be the straw that breaks the camel’s back as users seek cheaper alternatives.

Ethereum’s Daily Transfers Have Increased from $373 Million to Over $9 Billion in Just a Year

Over the weekend, Ethereum (ETH) was on overdrive as it soared past $2,000, a record-breaking milestone in its six years of journey. Nevertheless, a pullback was on the horizon as it has retracted to around $1,500 at the time of writing, according to CoinMarketCap.

New data by “Documenting Ethereum” shows that the second-largest cryptocurrency based on market capitalization has been transacting some enormous daily volumes. The crypto data provider noted:

“In one year, Ethereum has grown from settling ~$373m per day to over $9b per day.”

These statistics show that more participants are jumping on the Ethereum bandwagon, as evidenced by the fact that crypto wallets holding more than one ETH recently hit a monthly high of 1,175,408.

Furthermore, the remarkable bull run, which Ethereum enjoyed was partly triggered by the ballooning of the number of crypto whales holding at least $10,000 ETH to 1,287 on Valentine’s Day.

Ethereum’s non-zero addresses break the record

According to on-chain data provider Glassnode:

“The number of Ethereum non-zero addresses just reached an ATH of 54,759,720.”

This data shows that the Ethereum network is experiencing more users thanks to a booming decentralized finance (DeFi) sector and the launch of ETH 2.0 in December last year that seeks to transition from the current proof-of-work consensus mechanism to a proof-of-stake one, which is dubbed more environmentally friendly. DeFi’s total revenue recently reached $800 million this month.

Nevertheless, high gas fees are contributing to Ethereum’s current price plunge. ETH gas fees have hit an all-time high—with an average transaction fee of over $30, making DeFi almost entirely impractical to use for the majority of retail traders.

Without a doubt, the Ethereum network has grown over the years as evidenced by its record-breaking surge to $2,000, which saw the all-time high price of $1,400 set more than three years shattered last month. Time will tell whether the high gas fees will be a drawback to Ethereum’s journey to the moon.

Ethereum Gas Fees Hit a Monthly Low – Could this Trigger an ETH Uptrend?

After surging past the psychological level of $2,000 on Feb. 20, Ethereum (ETH) has been experiencing a pullback as intense selling pressure has been pushing the price down. ETH is hovering around $1,470 and is down by nearly 8% in the past 24 hours.

Ethereum has been experiencing a price plunge because of high gas fees as they recently hit an all-time high – with an average transaction fee of over $30. This proved detrimental because it made the decentralized finance (DeFi) sector almost entirely impractical to use for the majority of retail traders.

Nevertheless, new data by Glassnode notes that the total gas fees paid have hit a monthly low. The on-chain data provider disclosed:

“Total Ethereum fees paid (7d MA) just reached a 1-month low of $666,735.56.”

Ethereum might be back on its feet thanks to this revelation because its network is one of the most sought-after in the DeFi sector. The high gas fees were making it unattractive because users had started seeking cheaper alternatives.

DeFi has been one of the engines behind ETH’s recent bull run based on the soaring demand for some of its products, like smart contracts. For instance, DeFi’s total revenue hit $800 million in February.

20% of Ethereum supply hasn’t moved for more than 3 years

According to EthHub co-founder, Antony Sassano, 20% of the total Ethereum supply has stagnated on-chain for more than 3 years.

Source: Glassnode

This notable holding culture by some investors shows their growing confidence in the second-largest cryptocurrency based on market capitalization.

Crypto data provider Santiment recently stated that Ethereum’s top 10 whale addresses were holding a total of 16.86 million ETH as sentiment for Ether remained bullish.

Time will tell what Ethereum has in store because within the month of January alone, Grayscale Asset Management purchased an additional 243,302 Ether, which was valued at more than $380 million. The digital asset manager currently manages a total of 3.17 million ETH.

Crypto Addresses Holding At Least 100 Ethereum Hit 19-Month Low as 8.2% of Circulating ETH Locked in DeFi

Ethereum has been bearish since it surged past the psychological mark of $2,000.

The second-largest cryptocurrency based on market capitalization has been down by 6% from the past week to trade at $1,682 at press time, according to CoinMarketCap.

New data by on-chain data provider Glassnode reveals that the number of crypto addresses holding more than 100 ETH has hit a 19-month low of 45,518. These addresses are from centralized exchanges, as alluded to by digital asset firm Bloqport.

It, therefore, shows a holding culture because more ETH is being stored in cold storage or being locked in ecosystems like decentralized finance (DeFi).

Bloqport acknowledged:

“According to DefiPulse, 9.2 million Ether—around 8.2% of the circulating ETH supply—is now locked in the DeFi ecosystem.”

The boom in the non-fungible token (NFT) and DeFi sectors have boosted Ethereum’s bull run, but this has been derailed by high gas fees, which recently hit an all-time high – with an average transaction fee of over $30. This proved detrimental because it made the DeFi sector almost entirely impractical to use for the majority of retail traders.

ETH deposits in ETH 2.0 break the record

Ever since Ethereum 2.0 was launched in December 2020, it continues gaining momentum because it is seen as the silver lining needed to eradicate the stalemate being experienced in the current proof of work consensus mechanism.

As outlined by on-chain data analytics provider Glassnode, the “total value in the ETH 2.0 Deposit Contract recently reached an ATH of 3,559,106 ETH.”

Investors are betting big on Ethereum 2.0 because it is touted as a game-changer when solving issues like the high gas fees experienced in the ETH network, which have proven detrimental. For instance, users are seeking cheaper alternatives, and this has been one of the reasons why Ethereumès price has been nosediving.

Ethereum’s Sideways Consolidation to Continue as Indicator Shows ETH is Currently Undervalued

Ethereum (ETH) finds itself in a consolidation state ever since it breached the $2,000 mark a while back.

The second-largest cryptocurrency based on market capitalization is hovering around the $1,643 price at the time of writing, according to CoinMarketCap.

Market trader and analyst Michael van de Poppe has noted that ETH’s sideways consolidation will continue until a bottoming construction comes up. He explained:

“Ethereum is still fine here, despite the further dropdowns. Sideways consolidation, while a bottoming construction should be close.”

Ethereum’s high gas fees challenge

ETH has been grappling with the challenge of high gas fees. As a result, its price has been nosediving, given that some users are seeking cheaper alternatives.

EIP-1559, an Ethereum Improvement Protocol set to launch in July, has been touted as a game-changer that will address the issue of rising gas fees on the network.

Nevertheless, an “Ethereum Gas Report” by CoinMetrics data analytics shows that Ethereum’s EIP 1559 upgrade may not resolve this issue as the best bet is on Ethereum 2.0, which seeks to offer a transition to a proof-of-stake consensus mechanism from the current proof-of-work.

Investors are betting big on Ethereum 2.0 ever since it went live in December 2020 because the amount of ETH staked continues to grow by the day. As recently outlined by on-chain data analytics provider Glassnode, the “total value in the ETH 2.0 Deposit Contract recently reached an ATH of 3,559,106 ETH.”

Ethereum is currently undervalued

According to technical and on-chain analyst Ali Martinez, the MVRV ratio is around -3.93%, showing Ethereum is currently undervalued. He acknowledged:

“The MVRV, which measures the average profit/loss of addresses that acquired Ethereum in the past month, also favors the bulls. Each time the MVRV moves below 0%, a bullish impulse tends to follow. The MVRV ratio is now hovering at -3.93%, indicating ETH is currently undervalued.”

Time will tell whether ETH 2.0 will be a game-changer in eradicating the high gas fees problem currently experienced on the Ethereum network.

Ethereum’s All-Time High May Be Influenced by a Drop in ETH Gas Fees

Over the weekend, Ethereum (ETH) scaled new heights by hitting an all-time high of $2,159.

Its momentum is not showing any signs of relenting because it has soared to $2,185 at the time of writing, according to CoinMarketCap.

Santiment attributes this trend to a drop in Ethereum’s average fees. The on-chain metrics provider explained:

“Another aspect that contributed to Ethereum’s AllTimeHigh this weekend was the fact that average fees have dropped back to a 5-week low. With fees back to an average of $11.08, this is the lowest since March 5th, allowing for increased ETH utility.”

ETH has been grappling with the challenge of high gas fees, which at one point reached a level that made the decentralized finance (DeFi) sector ineffective. Moreover, they were beyond the reach of average users and traders.

Ethereum 2.0, launched in December 2020, is touted as a game-changer when tackling this problem because it seeks to transit the current proof-of-work consensus mechanism to a proof-of-stake framework, which is touted to be more environmentally friendly and cost-effective.

More participants are joining the Ethereum network

According to crypto data provider Glassnode, the number of non-zero ETH addresses has broken the record at 57 million. This signals that more participants are joining the Ethereum bandwagon, as evidenced by its current record-breaking moves.

For instance, the total value locked in ETH 2.0 recently surpassed the $8 billion mark, which is an indication that investors are betting big on this deposit contract.

Time will tell how Ethereum’s journey to the moon continues shaping up because its renewed upsurge is backed by various bullish fundamentals. For example, in March, payment giant Visa Inc. announced that it has settled for the Ethereum blockchain to undertake USDC transactions.

Visa disclosed that it had launched a pilot program with Crypto.com, a payment and encryption platform, and plans were underway to offer the USDC settlement to more partners later this year.

Ethereum Transfer Demand Increases as Average Gas Fees Hit a 3-Month High

The Ethereum (ETH) network has been experiencing high demand, as evidenced by an uptick in transfers and average gas fees.

On-chain metrics provider Santiment explained:

“With ETH transfer demand increasing, the amount of average gas used (in gwei) has risen sharply to 132.53 per transfer. This is a 3-month high in average gas fees.”

Crypto analytic firm Glassnode noted that the fees averaged $22.52, which signalled a 90-day high.

Previously, the Ethereum network grappled with the high fee challenge that proved detrimental to the average trader. Nevertheless, the continuously incorporated upgrades, such as the London Hardfork and Ethereum 2.0, are expected to handle this problem.

Recently, Ethereum’s perpetual swaps of open interest crossed the $8 billion mark for the first time since May. It, therefore, showed that Ethereum’s price and open interest were strongly correlated.

Total value locked in ETH 2.0 reach an ATH

According to Glassnode:

“Total value in the Ethereum 2.0 deposit contract just reached an ATH of 7,163,426 ETH.”

Ethereum 2.0, also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that sought to transit the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) framework.

The proof-of-stake algorithm allows the confirmation of blocks to be more energy-efficient and requires validators to stake Ether instead of solving a cryptographic puzzle. As a result, it is touted to be more environmentally friendly and cost-effective. ETH 2.0 is also expected to improve scalability through sharding.

Leading US-based crypto exchange Kraken recently revealed it had donated $250,000 to help open-source developer teams tasked with the ETH 2.0 upgrade. Meanwhile, Ethereum supply last active between six and twelve months reached a 14-month high of 22,432,181 ETH.

This shows more Ethereum was being liquidated because it was being transferred from cold storage and digital wallets to crypto exchanges.

Ethereum’s Price Going through the Roof, Subject to Renewed Interest from Short-Term Traders

Ethereum’s surge to historic highs has renewed the discussion of whether the altcoin season is back.

The second-largest cryptocurrency based on market capitalization scaled the heights by breaching the $4,400 level, a scenario not seen in its six-year journey.

IntoTheBlock believes this upward momentum has been sparked by an increase in the number of short-term traders. The data analytic firm explained:

“The recent highs have been pushed by a renewed interest of short-term traders, as the number of addresses holding ETH for less than 30 days is the highest number in over 12 months.”

This, coupled with diminished supply and high token circulation on the Ethereum network, have been pushing the price upwards.

Furthermore, on-chain metrics provider Santiment recently acknowledged that an increased utility was triggering Ethereum’s bullish momentum. ETH continues to be the most sought-after network in the decentralized finance (DeFi) and non-fungible token (NFT) sectors.

Retail investors are heating the Ethereum market

According to CryptoQuant CEO Ki-Young Ju:

“Retail investors are heating up the crypto market. Looking at on-chain data, the number of ETH withdrawals on centralized exchanges is increasing lately.”

Therefore, ETH has been exiting crypto exchanges in droves, given that the percent balance on exchanges recently dropped to 12.2%.

This is bullish because it signifies a holding culture because coins mostly leave exchanges for digital wallets and cold storage.

Despite the remarkable moves being made by Ethereum, this cryptocurrency is still grappling with high gas fees. Santiment noted:

“Ethereum’s gas fees are sitting at approximately $50, which does come with a higher risk of trader reluctance to circulate tokens, as a result. Average gas fees are also spiking mildly.”

Whether the challenge of high gas fees will be solved by a transition to a proof-of-stake (POS) consensus mechanism offered by Ethereum 2.0 remains to be seen.