The crisis brought about by Ethereum's continuous breakthrough to new highs
The recent high data of Ethereum is a bit unreal. After breaking through $1473, people are now predicting the breakout time of $2000. However, looking at the performance of the whole year last year, it can be seen that although its outbreak But it is not so close to the people. It can be said that DeFi can be successful and DeFi can be defeated.
Due to the explosion of DeFi applications last year, a large number of ecosystems were quickly built on Ethereum, which made the gas fee remain high and gave Ethereum room for steady growth.
However, since January this year, Ethereum has risen rapidly from $700, almost doubling. All of this means a surge in income for miners, which is not so friendly to retail investors using Ethereum.
Two days ago, Ethereum plummeted, but the highest peak reached nearly 500 GWei when it was around 1,000 US dollars. I tested a transfer at that time, and the handling fee was as high as 30 US dollars, while the handling fee of a transaction on Uniswap was as high as 50 US dollars. This The price is not just for newcomers, some old leeks that are often used will also feel that their wallets are short of money.
However, the total market value of digital currencies has yet to break through the high point of the 2017 bull market. According to Coinmarketcap data, as of January 26, the total market value of digital currencies other than Bitcoin was about 350.5 billion U.S. dollars, which was 3 years ago. The historical high of 539 billion The U.S. dollar fell 33.9%, and did not break through the market value high of the digital currency bull market cycle 3 years ago.
You must know that the number of applications 3 years ago is not at the same level as it is now. While the number of applications increases and the value increases, the total market value decreases, which means that the stock of funds has decreased. Many people are still waiting and watching. The number of newcomers entering is far less than the number of old people leaving. This also brings a huge test to the advancement of digital currency.
On the other hand, on the Ethereum side, PoS Staking has led to an upsurge of people locking up funds. Ethereum is also in a critical period of transition from PoW to PoS. However, the current pledge amount is about 2.83 million, and the annualized rate of return is 9.3%. , this data will continue to decrease according to the increase in the number of pledges, which means that the current pledgers are actually very likely to purchase Ethereum, otherwise the pledge will be completed as early as December 1, 2020. Get high returns.
The current situation is that the input cost of the participants will be higher and higher. Once the currency price plummets, and this decline cannot return to the input cost, there will be a bloody storm. It is best for miners to resist the event of EIP~1559 proof. The success of a matter must be driven by profit. When the interests of miners are damaged, even if the amount of gas fees decreases, the confirmation efficiency will still be reduced and it will not be able to operate normally; on the contrary, the income of miners will increase, and the gas fees will remain high for a long time. Without a large number of user participation, it will not work Lost the essence of blockchain.
When this problem has not been resolved, and the price of Ethereum continues to break through, the gas fee will only increase, which will hinder the participation interest of users. This is also one of the reasons why large funds have not entered the market. The system is several times, why use such a product?
The era of ETH 2.0 is still far away, and most of the DeFi applications are in the Ethereum ecosystem. Investors still bear this risk, but there is so much balance in the world. No matter what we participate in, we are just the ones who see and take the risk That's all.
