Ethereum congestion continues to increase, who can overtake in a corner?

Since the middle of this year, with the introduction of liquidity mining, Yield Farming and other games, the hot spot in the encryption market is none other than the DeFi sector. As the public chain platform with the most prosperous DeFi ecology at present, Ethereum’s network congestion continues to be serious, and the gas fee has also risen accordingly. The author believes that before Ethereum officially enters the 2.0 era, the current public chain track and Layer 2 track are facing an important window period, which is worthy of attention and exploration. the

Users who have daily transaction needs on Ethereum will definitely notice that the cost and efficiency of network transfers have almost changed to an astounding level recently. According to the data of the block browser Etherscan, since this year, excluding the two outliers in June and August, the gas price has soared from the initial 12 Gwei to 108 Gwei (nearly 30-day average), a full increase of 9 times. According to the author's calculation, if the legal currency usdt is used as the unit, the average fee for each transfer has increased from 0.08usdt to 2.73ust (the average value of the past 30 days), an increase of up to 34 times. Such a high transfer cost has become a point that every user cannot ignore. At the same time, in June this year, the community voted and passed the proposal to increase the Gas Limit by 25%, which increased the network throughput from 35 transactions per second to about 44 transactions. However, due to the increase in demand for transfers, the Gas Usage (Gas Used/Gas Limit) is still increasing. The current usage rate has reached 97%, which is only 3% away from the upper limit. the

Data: The amount of Ethereum destroyed yesterday was 12,100 ETH, a month-on-month decrease of 11.33%: According to the data from the masters on the Okeyun Chain, the current amount of Ethereum destroyed is 927,800 ETH, and the rate of destruction is 6.04 ETH/minute; the amount of Ethereum destroyed yesterday was 12144.68ETH, a month-on-month decrease of 11.33%, and the supply of Ethereum increased by 1270.69ETH compared with the previous day. [2021/11/18 6:57:39]

Data source: Etherscan, drawing: Cointelegraph Chinese

The soaring cost of transfers and the continued aggravation of network congestion reflect the extremely strong transaction demand on Ethereum. Thinking about the reasons, the popularity of the DeFi market must be ranked first. It can be observed from Figure 1 that the increase in Gas prices and transfer fees generally began to appear in early May this year, and increased sharply in July and August. During this period, it is time for various DeFi projects to roll out new ways of playing. In Figure 2, the author counted the 15 identifiable smart contracts that contributed the most fees on Ethereum in the past 30 days, mainly including DEX protocols, stable coins, oracles, lending agreements, and tokens. the

There are 202,135 unconfirmed transactions on Ethereum: Golden Finance News, according to OKLink data, there are 202,135 unconfirmed transactions on Ethereum, the current network computing power is 642.84TH/s, the network difficulty is 8.58P, and the current currency holding address is 62,295,747 , a year-on-year increase of 120,971, the 24h on-chain transaction volume is 2,104,234ETH, and the current average block generation time is 13s. [2021/9/7 23:07:22]

Data source: ethgasstation.info, drawing: Cointelegraph Chinese

Based on the transaction fee of the entire network in the same period, the author also calculated the proportion of the transaction fee of each contract. As shown in the figure, in the past 30 days, 15 contracts contributed a total of 79,048 ETH/US$31.73 million in handling fees, equivalent to 31% of the overall handling fees of Ethereum. Uniswap and USDT alone contributed 12%/US$12.3 million and 10%/$10.1 million. From this perspective, the current applications on Ethereum have a certain head effect, and are mainly financial. It has to be said that the current stage of the Ethereum network is at the intersection of the two states of prosperity and distress. The ecology is thriving and growing, but the supporting infrastructure construction has not yet been in place. The market is looking forward to ETH 2.0, but it is optimistic that it will have to wait until the end of this year at the earliest. Before that, other competitors should be in an important development window period, and the market will have a certain focus on the public chain and Layer2 track. the

JPMorgan Chase: Ethereum's switch to PoS consensus mechanism will increase adoption: In a recent report, two analysts at JPMorgan Chase said that Ethereum's switch to PoS consensus mechanism will increase adoption as institutional and retail investors Will take advantage of the high returns brought by Staking. At present, the annual income generated by all cryptocurrencies Staking is estimated at 9 billion U.S. dollars. The report predicts that after Ethereum transforms into a PoS consensus mechanism, this number can reach 20 billion U.S. dollars. By 2025, the annual staking income of all cryptocurrencies can be Reaching 40 billion US dollars / year. The report also pointed out that the decline in currency price volatility and the decline in energy consumption will become important factors that promote the adoption of Ethereum by mainstream users. (Crypto Briefing)[2021/7/2 0:23:40]

It seems that we have to go back to 2018 when the public chain track was really surging. At that time, there were many narratives such as "better Ethereum", and the keywords included TPS, expansion, consensus mechanism and so on. Today, similar problems with Ethereum still exist, but some public chains have been well developed. If you want to find a platform with faster transaction speed and lower cost than Ethereum and Bitcoin, there are actually many alternatives. The stable currency USDT is the best example. Currently, the networks that support its transfer transactions include: Bitcoin Omni, Ethereum, Tron, EOS, Algorand, Liquid, BCH and OMG Network, among which the version of USDT on Tron benefits from the low With zero handling fees and the support of major trading platforms, the scale has reached 2.88 billion US dollars, accounting for 28% of the total, and the number of transfers is comparable to that of Ethereum. The above examples are intended to reflect one point: the public chain track not only pays attention to innovation and progress at the technical level, but is equally important or even more important is the advancement of the market and ecology. When we pay attention to potential opportunities in this direction, we must comprehensively consider from multiple perspectives, and clarify the market pain points and opportunities at each stage. The current Ethereum congestion has aggravated the soaring fees, and the corresponding public chain must be worthy of attention. the

Sound | PeckShield: Ethereum block 7,080,000 has not yet been forked: According to the data of the PeckShield situational awareness platform: Ethereum mainnet block 708,000 has been dug out by nanopool at 13:57:13 this afternoon, and the transaction hash value is: 0x30f1e707150171df122488ffac94a7c165ea5d2cb7136e37aa. PeckShield is tracking the block generation of different versions of nodes. [2019/1/17]

Source: Tokenview

Similarly, whenever Ethereum enters a congestion dilemma, there will be endless talk about Layer 2 (second-layer solutions). Recently, some DeFi platforms such as Uniswap and Compound have revealed the idea of transferring to the Layer 2 network, and Vitalik has also made similar suggestions. According to the combing of public information, Layer 2 technologies are currently divided into six types: State Channel, Sidechain, Plasma, ZK Rollup, Optimistic Rollup, and Validium. the

Jinse Finance reported live on Karl Floersch, the core developer of Ethereum: the first chapter of the open source course "Encryption Economics" has been completed: Jinse Finance reported live on June 3. At today's Ethereum Technology and Application Conference, the core developer of Ethereum Karl Floersch gave a keynote speech entitled "Learning Cryptoeconomics". He said that there are many courses in "Cryptoeconomics", and the first chapter of the course has been completed, which is called "Centralized Payment Processor". At the same time, more than 60 people in the networking community have participated in the online dialogue, and the process is very good. It is hoped that bottom-up discussions will determine how to conduct the lesson, including identifying topics, giving advice, sharing stories, etc. The course also has a "night mode". This is just the beginning, and I hope more people will participate in this open source course. [2018/6/3]

Drawing: Cointelegraph Chinese

State Channel: Inspired by Bitcoin’s Lightning Network, it is a technical solution to achieve expansion through off-chain transactions, which has better performance and usability. Representative projects: Celer Network and Raiden Network.

Sidechain: A blockchain that is independent of the main chain, has its own validators and operators, and can transfer assets to and from the main chain. Representative projects: Skale Network and POA Network.

Plasma: A sidechain technology with non-custodial features, which is more secure than ordinary sidechains. If there is any error in the Plasma chain, users can safely exit the Plasma chain. Representative projects: OMG Network and Matic Network.

ZK Rollup: Based on the branch born of Plasma, it compresses and stores the user state on the chain in a Merkle tree, and transfers the change of the user state to the off-chain, and at the same time uses zkSNARK zero-knowledge proof to ensure the correctness of the change process. Highest security. Representative projects: Loopring and zkSync.

Optimistic Rollup: It is also a branch based on Plasma, which uses a similar rollup technology to increase network throughput by calculating status updates, and is slightly less secure than ZK Rollup. Representative projects: Optimism and Unipig.

Validium: Very similar to zkRollup, the only difference is that data availability in zkRollup exists on-chain, while Validium makes it off-chain. Validium performs optimally in terms of performance, but at the expense of certain security. Represents the project StarkEx.

Different Layer 2 solutions have their own advantages and disadvantages. Although they cannot fully meet all requirements, they can basically perform well in one or several dimensions. When the project considers Layer 2, the most suitable solution can be selected according to the priority of the demand.

ETH 2.0 will eventually come, and it will gradually evolve into a better and better underlying smart contract platform in a phased manner. It can be said that other public chains and Layer2 solutions are currently facing a critical period. Whether they can seize the opportunity and increase their market share will largely determine their future development. After all, the law of any market is the survival of the fittest, and the blooming of a hundred flowers may also be short-lived.

Author: Alex

Tags：

AAVE