The network is in short supply and the price is "four consecutive suns". Is the spring of Ethereum coming?
Produced | Odaily (ID: o-daily)
Produced | Odaily (ID: o-daily)
According to the OKEx market, at 20:00 on the evening of September 17, Beijing time, the price of Ethereum successfully broke through $200; as of 9:00 on the 18th, ETH was tentatively reported at $212, an increase of 7% in 24H.
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ETH starts to exert force
In the small bull market that started in April this year, the price trend of ETH was significantly weaker than that of other mainstream currencies: ETH had a maximum increase of 170% in the year, while BTC had a maximum increase of 270% in the same period, EOS had a maximum increase of 240% in the year, LTC had a maximum increase of 370% in the year, The highest increase of BCH in this year is 230%.
The price trend of ETH once made investors exclaim that they got into the wrong car. "There are so many mainstream coins, but I chose the worst one, and I was cut off as a leek when I first entered the market." Investors once said to Odaily.
In the past three weeks, the price of Ethereum seems to have a recovery trend.
Encryption analyst Li Ao said that from the weekly chart, the price trend of Ethereum has shown "three consecutive positives" in the past three weeks; the price trend in the past four days has shown "four consecutive positives", leading the rise of mainstream currencies. This also shows that ETH bulls are currently gaining the upper hand and the price downtrend has been contained.
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(ETH price daily chart)
"US$200 was the resistance level of ETH before, but now the situation has reversed, and the resistance level has become a support level." Li Ao explained that Ethereum may use US$200 as a support level in the future.
Li Ao added that if there is a correction in the price on the daily chart or even the weekly chart, and a "4 consecutive positives + 1 negative" pattern appears, it indicates that ETH is about to start the main rising wave, and investors can increase their positions appropriately. "The current general direction is still bullish, and the callback is only temporary. Be cautious about shorting and don't add leverage."
Like Li Ao, OKEx chief industry researcher Kong Deyun is also optimistic about the future price trend of ETH.
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The sharp increase in transactions will increase the price of ETH?
In the past few trading days, the price of ETH has soared, with an increase of more than 11% on the 7th, leading the rise of mainstream currencies.
What puzzles investors is why the price of ETH has fluctuated so much recently?
Yuanyang, an Ethereum observer, believes that ETH has fallen too much compared to BTC before, and this price increase is an oversold rebound.
Odaily found that since the end of this year, ETH/BTC has been in a downward trend, with a maximum drop of nearly 60%; while BCH/BTC, LTC/BTC, etc. have all experienced significant increases, with a maximum drop of only 50%.
Han Shier, founder of the NEST community of the Ethereum project, believes that the main reason for the recent rise in the price of ETH is that the business volume on the Ethereum network has increased significantly, resulting in a very congested network, which in turn increases the miner's fee for transaction packaging.
"Take decentralized mortgage lending on NEST as an example. When the Ethereum network is not congested, the miner's fee for deploying a loan contract is about 0.003 ETH, but now it needs 0.02 ETH, which is an order of magnitude worse. In other words, due to the shortage of Ethereum network resources, the miner’s fee has been greatly increased, which has changed the supply and demand relationship in the ETH market and prompted this round of ETH price increases.” Han Shier said.
So the question is, where does the huge trading volume come from?
Han Shier believes that one of the sources of the huge trading volume is Tether. On September 12th, Tether migrated USD 300 million of Omni-based USDT to Ethereum, and the number of USDT transactions accounted for about 25% of the entire Ethereum network, which also led to a sharp increase in the transaction volume of the Ethereum network, almost operating at full capacity.
According to data research organization Ethgasstation.info, in the past 30 days, Tether fees generated by processing Ethereum transactions have reached as high as $260,000, and the network utilization rate of Ethereum has also soared to 90%. As Tether takes up more capacity, there is less capacity left for other developers to use.
In addition, the second source of huge transaction volume is the vigorous development of the Ethereum DeFi ecosystem, which has led to an increase in the use of smart contracts. "Including the contract deployment volume of leading DeFi projects such as MakerDao, NEST Protocol, Compound, etc., in the latest quarter, there has been a substantial increase, occupying more network resources. At present, the Gas fee of the Ethereum network has contributed a lot Some products and services from the DeFi direction, such as decentralized mortgage lending, DEX, stable currency, etc." Han Shier said.
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Solution: increase Gas Limit
According to data from Glassnode, on September 13, the seven-day moving average of Ethereum Gas daily usage reached approximately 48.193 billion Gwei, the highest value since the creation of the Ethereum blockchain. At the same time, Ethereum also began to experience congestion The phenomenon.
In order to solve the network congestion problem, on September 14th, miners began to vote together with Spark Pool (Xinghuo Mining Pool) and F2Pool (Fish Pool) to increase the Gas Limit from 8 million to 10 million. On the evening of September 15th, V God tweeted: "Almost exactly 50% of miners are now voting for an increase in the Gas Limit, and this number has exceeded 8.1 million for the first time."
The so-called Gas Limit refers to the upper limit of Gas that can be consumed by each block, not the Gas limit of a packaged transaction. The larger the block Gas Limit, it means that a single block can package more transactions, which can directly increase the TPS value of Ethereum.
Many people think that the increase of Gas limit can promote the increase of ETH price, but in fact the two are relatively independent. "Will the highway be built to promote the rise of fiat currency? Obviously not." Kong Deyun said.
However, some respondents are not optimistic about increasing the Gas Limit.
Han Shier believes that increasing the gas limit of a block can indeed alleviate network congestion, but this cannot fundamentally solve the problem, because the larger the gas limit of the block, the larger the amount of data packaged in the block, which will lead to the It takes longer for blocks to propagate throughout the Ethereum network. If the confirmation time of miners’ packaged transactions is relatively long, it will increase the probability of orphan blocks and uncle blocks, which will not only reduce the income of miners, but also affect the efficient operation of the Ethereum network.
"Therefore, miners cannot greatly increase the Gas Limit of a block without restriction, and must make dynamic small adjustments according to the operation of the Ethereum network to ensure the smooth operation of Ethereum." Han Shier said.
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Gradually promote ETH2.0
At the beginning of its birth, Ethereum set four stages: Frontier (frontier), Homestead (homestead), Metropolis (metropolis) and Serenity (tranquility).
Ethereum is currently in the metropolis phase, and Serenity is ETH 2.0. Different from the ETH 1.X stage, ETH 2.0 will have two important changes: one is the conversion from PoW (proof of work) to PoS (proof of equity); the other is the expansion of Ethereum performance.
Despite various problems in Ethereum, core personnel including the co-founders have left one after another, and the fork has been postponed, ETH 2.0 has been moving forward.
On September 14, Jonny Rhea, an engineer of PegaSys, the ConsenSys development team, announced on Twitter that the multi-client operation of ETH 2.0 has been confirmed. Consistency has now been achieved by installing the 7 clients of the beacon chain and forming the network. The seven clients are: Prysm from Prysmatic Labs, Artemis from PegaSys, Nimbus from Status, Lighthouse from Sigma Prime, Lodestar from Chainsafe, Trinity from Triniy Team, and Harmony from Ether Camp.
ETH 2.0 is expected to be realized in 2020~2021. The various teams developing the Ethereum 2.0 client have completed the test network configuration as a single client, but running on multiple clients is still in the development stage. The development team is currently gathering in Boston for field validation.
In addition to ETH 2.0, the ETH 1.X Istanbul hard fork upgrade, which is a transitional stage, is also proceeding step by step. Although the upgrade process was not as smooth as expected-the activation of the test network was postponed to October 2, and the activation of the main network will be postponed to November, but fortunately, the problem is not big, and it will go on smoothly after all.
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The recovery in the price of ETH also gave investors stronger confidence.
"Insist on fixed investment, and the return will definitely come." Investors who have fixed investment in ETH said that their current comprehensive rate of return on fixed investment ETH is about 30%.
"ETH has risen to 1,000 US dollars, and I will send 100,000 red envelopes in the group, and you can take screenshots." An ETH miner said.
