| Breaking down Ethereum 2.0 and its sweeping impact on crypto markets By Christine Kim Research Associate August 25, 2021 Sponsored by ETH Price -2.72% $3,210.30 Market Cap $376.08B Volume (24H) $23.27B (As of 8/24/21 @ 20:18 UTC. ETH price % change over 24 hours.) If you were forwarded this newsletter and would like to receive it, sign up here. I joined CoinDesk as an intern in the summer of 2018. Since then I’ve gone on to do a lot of things at the company, including kick-starting this Ethereum-focused newsletter. It’s been my pride and joy building Valid Points from the ground up, ideating its structure, writing its weekly columns and editing its guest contributions.
For the past two months, CoinDesk Research’s Teddy Oosterbaan has been contributing weekly hot takes on the top headline news of Ethereum. Starting from next week, he will take over the reins for Valid Points and become the main writer of this newsletter.
It’s about time a new voice leads the conversation on Ethereum news, and I have full confidence there’s no better person at CoinDesk to do it than Teddy.
I want to sincerely thank all the readers of Valid Points who have supported me and my writing since December 2020. For the last time, I’m your host, Christine Kim. Reply to this email any time with your thoughts, comments or queries. And between reads, chat with me on Twitter.
Welcome to another edition of Valid Points. – Christine Pulse check The following is an overview of network activity on the Ethereum 2.0 Beacon Chain over the past week. For more information about the metrics featured in this section, check out our 101 explainer on Eth 2.0 metrics. Disclaimer: All profits made from CoinDesk’s Eth 2.0 staking venture will be donated to a charity of the company’s choosing once transfers are enabled on the network. A message from zkTube zkTube's blockchain innovations to Ethereum Layer2 will enable a new transaction speed (TPS) capability of 3,000 transactions per second, realizing Vitalik Buterin's goals for Layer2 development. Meanwhile, zkTube's Ethereum Layer2 has successfully lowered around 98% of transaction costs compared with Ethereum Layer1. In addition, it is the only layer2 project that supports mining, giving it a significant advantage over its competitors. PayTube is a Zero-Knowledge technology-based Wallet that gives you bulletproof protection, instant availability & total autonomy over your digital assets, powered by revolutionary cryptography. zkTube's platform supports financial management, collection bidding, NFT, Swap, DEX/CEX and other protocols. It also supports fiat and multi-chain stablecoins in over 250 countries. zkTube aims to become an indispensable Layer2 environment builder and solution provider in the WEB3.0. zkTube can help you realize efficient asset migration from Layer1 to Layer2, and builds the underlying technical framework Lego for developers and reduce development costs. Click here to join zkTube today. Business Cooperation：[email protected] New frontiers One of the first articles I wrote about Ethereum for CoinDesk was headlined “Unstoppable Scams? Ethereum’s Gambling Problem Is Only Getting Worse.”
At the time, in the late summer of 2018, Ethereum’s most popular decentralized applications (dapps), outpacing even the incumbent CryptoKitties gaming dapp, were gambling dapps that closely resembled Ponzi schemes. LastWinner, a clone copy of another infamous gambling dapp called FOMO 3D, had raised over $7 million in ETH from users within the span of a week and was eating up one-third of Ethereum’s total computational power, also called hashrate.
Meanwhile, the biggest headline news about Bitcoin were the pending decisions by the U.S. Securities and Exchange Commission (SEC) on two bitcoin exchange-traded fund (ETF) applications put forth by ProShares.
As Ethereum attracted retail users and scammers looking to make a quick buck, it seemed the majority of investors and traders serious about adopting cryptocurrencies for a mass audience were focused on Bitcoin.
In many respects, market infrastructure for and regulatory awareness about bitcoin (BTC) has paved the way for cryptocurrencies like ether (ETH) to follow.
For example, the classification of being a commodity rather than security in the eyes of the U.S. Securities and Exchange Commission (SEC) was first granted to bitcoin in 2018 and then for ether in 2019. Exchange-traded funds (ETFs) in Canada were first approved for bitcoin then for ether. Crypto custody bank Anchorage Digital started its lending service with bank-grade, bitcoin-backed loans and only recently expanded its offerings to include ether-backed loans through an FDIC-insured bank this summer.
However, trends are changing, and evidence is mounting to suggest that Ethereum has finally either caught up to or surpassed Bitcoin across a number of key metrics, even as other smart contract blockchains such as Cardano and Solana show promising signs of real adoption and value.
Key Metrics
For starters, Ethereum is surpassing Bitcoin in total value transferred on-chain. Using Coin Metrics’ adjusted transaction volume estimates, so far in August $185 billion worth of ETH has been moved on Ethereum while only $180 billion of BTC has exchanged hands on Bitcoin. The last time Ethereum passed Bitcoin in monthly transfer volume was in May 2021.
Every month since June 2020, users have been paying more in fees to send transactions on Ethereum than Bitcoin. In 2021 alone, total fees in dollar terms on Ethereum were four times higher than Bitcoin, suggesting demand for block space on Ethereum is outpacing demand for block space on Bitcoin.
Continue reading the full column here. A message from CoinDesk Introducing Crypto for Advisors, a weekly newsletter built specifically for financial advisors (FAs) and registered investment advisors (RIAs). Crypto for Advisors, delivered every Thursday, is designed to inform and educate financial professionals who seek to incorporate this rapidly moving asset class into their work. Subscribe today. Validated takes Ethereum’s most popular software client, Geth, has issued a hotfix to a high severity security issue in its code. BACKGROUND: All users were encouraged to upgrade immediately to the latest version of Geth, v.1.10.8. The last time a fix for a bug in Geth code was released to users, it caused a temporary chain split on Ethereum due to a lack of communication between Geth developers and users about the urgency of the upgrade.
Crypto investment firm Paradigm helped mitigate a potential $350 million bug in decentralized exchange SushiSwap’s launchpad code. BACKGROUND: Paradigm is a well-known investor in Uniswap, the original exchange that inspired the creation of SushiSwap. Paradigm Research Partner Sam Sun identified a vulnerability in SushiSwap code that could have allowed hackers to drain users’ funds from the exchange. Sun disclosed his findings with the SushiSwap team, pulling off one of the biggest whitehat rescues ever in the crypto industry.
Visa announced that it bought a CryptoPunk NFT on Monday, spending roughly $150,000 on the digital art piece. BACKGROUND: Visa’s head of crypto, Cuy Sheffield, said in a blog post that the main purpose behind the purchase was to learn more about the growing non-fungible token market. "We think NFTs will play an important role in the future of retail, social media, entertainment and commerce," Sheffield wrote.
$1.5 million has been awarded to Ethereum software client teams such as Besu, Erigon, Geth, Nethermind and Nimbus. BACKGROUND: These client teams build the software that enable users and businesses to connect to the Ethereum network. The grant money was donated by Compound Grants, Kraken, Lido, Synthetix, The Graph and Uniswap Grants.
Decentralized exchange (DEX) volume is projected to hit around $80 billion for the month of August. BACKGROUND: June and July showed slowing trading volume, but August is on pace to be the second-best month in DEX history. EIP 1559, a revival in governance tokens and an emerging cross-chain ecosystem have helped bring positive sentiment back into the decentralized finance market this month.
Ether (ETH) price and active sending addresses have started to diverge over the past week in a way that suggests bearish price trends to follow. BACKGROUND: The number of active addresses on Ethereum is usually a leading indicator on ETH price. While prices have increased 4.87% over the last seven days, the number of active addresses has dropped 5.50% over the same time period.
Factoid of the week Open comms In case you're not a fan of this newsletter, you can unsubscribe here. We're sorry to see you go. Valid Points incorporates information and data about CoinDesk’s own Eth 2.0 validator. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post. You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is: 0xad7fef3b2350d220de3ae360c70d7f488926b6117e5f785a8995487c46d323ddad0f574fdcc50eeefec34ed9d2039ecb. Search for it on any Eth 2.0 block explorer site! I'll be extending today's conversation on Ethereum 2.0 with Consensys’ Ben Edgington in a CoinDesk podcast series called “Mapping Out Eth 2.0.” New episodes air every Thursday. Listen and subscribe through the CoinDesk podcast feed on Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica, IHeartRadio or RSS. Valid Points A newsletter from CoinDesk See Previous Editions Copyright © 2021 CoinDesk, All rights reserved. 250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk emails. | 