Price spikes in Ethereum are back. After a weekend reminiscent of the bearish season, Ether (ETH) prices started the 17th week of the year with strong price increases. In addition, transaction fees (gas fees) on Ethereum fell to their lowest level in recent months.
Ethereum prices, which entered the week quickly, seem to compensate for the losses experienced last weekend. At the time of this writing, an ETH price hovers around $ 2,479.
Ethereum, which gained about 13% value compared to yesterday, will only need a 7% price increase to reach its all-time high of $ 2,640. At the same time, network fees, which are shown as one of the biggest weaknesses of the smart contract platform, fell to the lowest levels since the end of 2020, according to data from blockchain analysts.
Many factors are cited as the possible reason behind the declining gas prices. However, the Berlin hard fork on Ethereum, which is expected to tackle gas fees in the field of smart contracts, may have finally had its effects.
Flashbots Are Used To Reduce Gas Fees In Ethereum
A more likely and permanent theory used to explain falling prices is that flashbots are becoming increasingly common and lowering prices. Flashbots represent an organization working to create solutions to MEV values in Ethereum. MEV stands for Miner Extractable Value. This value is actually a scale that evaluates how much profit mining operations bring, and therefore network security. This scale includes traditional values such as earnings from transaction fees and rewards from Ethereum blocks, as well as additional values such as reordering transactions, making additions to transactions, and blocking transactions within miner-generated blocks.
Bots are widely used in this area as even a block in arbitrage trading sets the difference between making a profit and not getting anything or even making a loss. As a result, gas charges are rising because each bot wants its own transactions to be carried out as quickly as possible within the block. Ethereum users who trade in small volumes also have to pay more fees, so this is the part that suffers from this business.
Every Three Ethereum Blocks Contain Flashbot Bundles
Flashbots, on the other hand, developed a method in which MEV transactions are determined and combined into a bunch. MEV bundles are combined with some kind of tip and transferred directly to the miners. Thus, the gas fee required for each operation within a bundle is reduced. Since the beginning of the year, many mining pools have incorporated flashbots. In a transparency report published by the Ethereum project, it was stated that as of mid-April, one in three Ethereum blocks is using flashbot clusters.
DeFi Projects Support Ethereum
Sergei Nazarov, co-founder of Chainlink, an oracle network that manages $ 15 billion worth of crypto assets on the Ethereum blockchain, commented on the developments as follows: Thousands of developers are building applications on the Ethereum blockchain, the fastest growing area of the blockchain ecosystem. As the number of users using DeFi applications developed on the Ethereum blockchain increases, the demand for Ethereum will increase because when users want to perform a transaction on these applications, the digital asset they use must be Ethereum. Also, some of these Ethereum apps promise double digit returns. "
According to Nazarov, this rally in Ethereum was also supported by the DeFi applications market, which is currently valued at over $ 59 billion.
DeFi can be thought of as a headline that defines more than one type of application. It is possible to carry out all kinds of financial transactions such as borrowing, lending, trading, savings, derivatives, options, stocks with these applications using crypto currencies. DeFi applications may reboot the traditional finance industry in the future.
Investors Wanting to Own a Whole Coin are Buying Ethereum
Simon Peters, working as a cryptocurrency analyst at eToro, underlined that the momentum observed in Ethereum in recent days is only happening in Ethereum and that Ethereum is gradually separating from Bitcoin: “For the last three years, these two cryptocurrencies have moved in a certain harmony. crypto money markets have started to mature.
Investors are now turning to coins with a wider choice of cryptocurrencies and the highest potential in the long term. Ethereum also has a lower value in dollars, making it a good alternative to Bitcoin. People who buy Ethereum own a coin as a whole, so some investors prefer Ethereum.
Recently, my favorite coin has been my favorite. If it goes this way, it still seems to be my first choice.
Totally Agree with you