Ethereum, the second-largest cryptocurrency by market cap rose by more than $400 on December 4th to record a new yearly high of above $1000 as its market cap breached the $100 billion mark in nearly three years as well. Bitcoin’s astonishing bull rally might have taken away all the limelight, however, ETH quitely managed to surpass bitcoin on year-to-date returns in 2020.
Ethereum has managed to climb by 10X since its March crash in 2020 with spot volumes on exchanges such as Binance crossing $3 billion in a single session shows the surging demand for the second-largest cryptocurrency. The upcoming launch of Ether Futures by CME is also a key reason behind people hodling ETH, as many belive once institutional influx starts through the futures market, the price of the token would skyrocket new all-time-highs.
As Ethereum started to surge, so did many other platforms and tokens built on top of its especially defi.
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) January 4, 2021
Gas Fee Spike Makes Uniswap Nearly Unusable
As the price of ETH surged late Sunday, the gas fee for processing transactions spiked too, costing an average of $155 to process a transaction. This also led to a great blockage on Uniswap, a popular DEX platform used for swapping tokens primarily in the defi ecosystem
Trying to use Uniswap right now pic.twitter.com/7QP1wTbxl1
— Joseph Young (@iamjosephyoung) January 4, 2021
Insane Gas Fee on the Ethereum network has led to several congestions on the network in the past year, a key aspect that has troubled co-founder Vitalik Buterin as well. The c0-founder has promised that the new PoS based ETH2.0 would resolve all these issues as it would make use of sharding to allow for parallel processing thus scaling the network on par with centralized processing giants such as VISA.
The first phase of ETH 2.0 was launched on December 1st marking the start of a multi-year roll-out and expected to take approximately 2 years. However, as ETH nears a new all-time-high, the growing gas fee can come back to haunt the network and make it extremely difficult to use.