- In the last few days, Ethereum’s transaction volume is on its way to reach new record levels.
- The rapid increase in transaction volume could pose serious difficulties for the Ethereum network.
- Danny Ryan announced that the date for the launch of the ETH 2.0 test network will be announced on Monday.
Despite the continuing sideways trend of the ETH price, the use of Ethereum (ETH) has been increasing strongly for several weeks. This is shown by the analysis of daily ETH transactions. Although these reach the historic all-time high of around 1,350,000 daily transactions in January 2018, new peaks are currently being recorded. Last Friday, around 1,070,000 ETH transactions were executed.
So far, the increase in transaction volume has not had a clear impact on the ETH price, which has been struggling with strong resistance at the $250 mark for some time. In the past, it has often been observed that new investors enter the market as trading volumes increase. This has not yet happened, but could follow in the coming days and have a positive effect on the ETH price.
However, the increase in transactions within the Ethereum network may also create problems. Due to the current technical infrastructure, Ethereum could reach its limits in terms of scalability. On the one hand, the transaction costs and thus the gas price within the Ethereum network are constantly increasing.
On the other hand, the Ethereum network is currently reaching its capacity limits with about 15 transactions per second. When these limits were last reached in 2018, there were sometimes considerable delays in transactions and a sharp increase in transaction costs. In 2018 it was the ICOs that put the Ethereum network to the test, but today it is DeFi applications such as yield farming that could drive transaction volumes to unprecedented levels.
The following chart shows that the capital tied up in DeFi applications has reached a new historical record of $2.741 billion.
To be able to process this growing number of daily transactions, Ethereum must implement new scaling solutions with the release of ETH 2.0. With Ethereum 2.0, it will be possible to process several thousand transactions per second, thus significantly increasing the scalability of the network.
Ethereum 2.0 Testnet: Start date will be announced on Monday
The developers of the Ethereum 2.0 network have announced that significant progress has been made and development is proceeding as planned. After a long development period and several months of various test phases, the launch of the Ethereum 2.0 test network is now within reach. The project coordinator, Danny Ryan, explains:
There is a little bit of stability work going on and other than that the blocker is some UX things (trying to make key management as close to mainnet as possible). I expect we announce a date Monday/Tuesday.
The test net will be a simulation of the real net, which will work with worthless “fake coins”. In a few months Ethereum 2.0 will be officially launched, heralding the next era of Ethereum.
Last updated on July 19, 2020