After plummeting from a high of $4,350 in May to under $2,000 in only three months, Ethereum is now trading at $3800. According to Coingecko data, the price of ETH has risen by 8% in the previous 24 hours, scraping over $3,800 for the first time since early September.
Today’s increase can’t be attributed to a single factor. The rising tendency, on the other hand, becomes more obvious when you zoom out. In the last year, the price of Ethereum has increased by almost 900 percent.
Initial developments on Ethereum 2.0, which will switch from a proof-of-work to a proof-of-stake mechanism, are steadily progressing. Faster transactions and cheaper fees are significant concerns for a network that often gets congested as a result of replacing miners with “staked” validators to process transactions and offer security.
DeFi and NFTs Power Up Ethereum
Decentralized finance (DeFi) and growing public interest in NFTs (the unique digital tokens that transfer ownership of a digital or physical collectable) are two major factors contributing to the current congestion. However, Ethereum still accounts for more than two-thirds of the overall money floating about in DeFi according to the DeFi Llama, even though additional chains have been built to be compatible with P2P lending and trade apps.
Ethereum was the birthplace of non-fungible tokens (NFTs), which were later adopted by other chains such as Solana and Flow. With a monthly trading volume in the billions on the biggest NFT marketplace, OpenSea and over half a billion on NFT-based game Axie Infinity on DappRadar’s most recent data, NFTs have been on a bull run unlike what has been seen so far in the crypto world.
There will be no more Ethereum proof-of-work mining after the PoS Beacon Chain “merges” with the existing Ethereum mainnet. Although it’s unlikely to happen this year, Eth2 researchers are looking at methods to speed up the schedule before the deployment of shard chains begins in earnest.
It is possible that the new mainnet would use 99 percent less energy than the old mainnet since it will be able to execute smart contracts on PoS instead of the current energy-guzzling mining operations. Additionally, users will see reduced wait times for transactions in fixed blocks due to the introduction of variable block sizes with the London update. As the quantity of transactions increases, the blocks may dynamically grow or shrink.