Ethereum Core Developer Concerned about Network Health as Miners Raising Gas Limit by 25%

https://bitcoinexchangeguide.com/ethereum-core-developer-concerned-about-network-health-as-miners-raising-gas-limit-by-25/

In the light of increasing network utilization, Ethereum miners have decided to increase the gas limit of the network from 10,000,000 to 12,500,000.

Gas fees are paid by users to make transactions and transfer smart contract data. The block size of the network is limited by the amount of gas that can be sent per block.

As such, Ethereum’s block size varies depending on the gas limit, which its protocol allows miners to adjust a bit by about 0.1% in each new block, unlike Bitcoin, which has a fixed block size.

Now, Ethereum miners are in process to increase the network’s capacity by 25% to increase the number of transactions the network can process per second, making it run faster.

“In theory, this means that the Ethereum network now has the capabilities to handle ~44 transactions per second, instead of ~35,” said Bitfly, the parent company of Ethermine, an Ethereum mining pool. “Another huge milestone for the community.”

The last time a significant gas limit was increased by miners happened in Sept. 2019, from 8 million to 10 million.

Gas usage has jumped 81% YTD and nearly 10% within a day, as per Glassnode.

Block size has already started rising, with miners voting to increase the limit. Currently, it hovers around 12,000,000. The issue with this increment is that it would make the blockchain bigger as such, making it more difficult and costly to sync and run a full node along with causing some DoS concerns as well.

Ethereum core developer Péter Szilágyi had some harsh words to share about this development, which he is against.

“TL;DR: The Ethereum miners don’t give a fuck about the long term health of the network nor about DoS attacks,” said Szilágyi.

“Ethereum miners and devs should really learn a bit of complexity analysis from Bitcoin devs. They at least figured out that math is a bitch that you don’t screw with,” Szilágyi said.

Ethereum co-founder Vitalik Buterin also chimed with “high txfees *are* making the chain much less useful for people.”

Buterin also shared that Sparkpool reached out to him about it over a month ago, and he opposed the decision to increase the fees limit because Szilágyi did. But “the last 6 weeks of high txfees have put genuine pressure on people so I don’t blame them for this decision,” he added.

Raising the gas limit means reducing the transaction fees, making the network cheaper to use. Buterin shared how he recently spent $40 just to transfer to three people. In 2020, mean gas price has increased 237%, and as we saw, two transactions spent over $5 million in fees.

Ethereum (ETH) Live Price

1 ETH/USD =$227.1244 change ~ -0.69%

Coin Market Cap

$25.31 Billion

24 Hour Volume

$995.15 Million

24 Hour VWAP

$229

24 Hour Change

$-1.5669

Derivative Exchange BitMEX to Launch Bitcoin-Settled ETH/USD Quanto Futures Contract

https://bitcoinexchangeguide.com/derivative-exchange-bitmex-to-launch-bitcoin-settled-eth-usd-quanto-futures-contract/

The crypto derivatives exchange BitMEX is launching ETHUSD Quanto futures contracts with up to 50x leverage on 5 May 2020 at 04:00 UTC, announced the exchange on Friday. These contracts will expire quarterly and the first one in June.

Unlike perpetual contracts, in Quanto, the difference between the underlying and fixed strike is paid out in another currency.

ETH/USD Quanto futures will be settled in Bitcoin and have a fixed BTC multiplier regardless of the USD Ethereum price. This will allow traders to long or short ETH/USD exchange rate without touching either ETH or USD.

With this new product and one of its kind in the crypto market, BitMEX is offering yet another new trading opportunity on its platform.

Because Quanto futures are immune to exchange rate fluctuations it allows one to invest and derive a payoff purely from the performance of the underlying commodity.

ETH/USD Quanto futures are now available on Testnet under the symbol ETHUSDM20 that will expire on 26 June 2020 at 1200 UTC. With a maximum leverage of up to 50x, they have a fixed Bitcoin multiplier of 0.000001 XBT (100 Satoshis) and contract value of ETH/USD Price * Bitcoin Multiplier (100 Sat/$1).

An attempt to regain market share?

This new product came after the derivatives exchange experienced a denial-of-service attack during the market crash in mid-April that led BTC price to fall to $3,600 on BitMEX.

Since Black Thursday that saw bitcoin price plunging about 50%, the BTC balance on the exchange has been constantly declining. The amount of BTC on the exchange is currently down nearly 32% since the 13th March top.

glassnode BitMEX Balance
Source: Glassnode

This drawdown could be because of BitMEX losing some of its market share to Binance. Also, crypto traders are deleveraging and withdrawing their remaining unused trading capital, according to Coin Metrics.

While BTC balances on other exchanges were also taking a hit, the amount of ETH held by exchanges grew during that period. Bitfinex, however, saw the largest increase in its ETH balance, unlike others that didn’t have a more than 10% increase.

Now, it’s to be seen if BitMEX will be able to recover its lost market share or if the marketplace will see new exchange emerge at the top.

Ethereum Price Crash Causes ‘Extreme’ Network Congestion; Gas & DeFi Shot Up

https://bitcoinexchangeguide.com/ethereum-price-crash-causes-extreme-network-congestion-gas-defi-shot-up/

TLDR:

  • Ethereum price sees its biggest percentage drop ever
  • Borrowing demand for DAI is currently at record levels
  • ETH median gas price just spiked to the highest level it’s been in over 1 year
  • Ethereum network clogged while unconfirmed transactions rose because of this Binance increased ETH withdrawal fees by 100% and ERC20’s by 66%

Today’s crypto carnage saw the second-largest cryptocurrency losing 33 percent of its value and is currently trading at $141.44.

The price of Ether fell from about $200 to as low as $129, making it the biggest percentage drop in the digital asset’s price. Ever. And this has been on the back of substantial volume as currently, over a billion dollars worth of Ether are exchanging hands-on top ten exchanges with real volume.

This drop came amidst the broader market turmoil. For the first time since May, Bitcoin dropped to $5,700 level and the US stock market extended its losses on Thursday triggering yet again a trading halt within 10 minutes of the market opening.

The global markets are suffering because of the continued uncertainty and fear about the coronavirus (Covid-19) which has been declared a pandemic by the World Health Organization (WHO).

This black swan event, however, had a lot more complications for Ether besides just price.

Massive network congestion

The crash in Ether price resulted in the price of Gas, the computation power on the Ethereum network to shoot up. Measured in gwei, Gas prices went to 100, making the cost of sending basic transactions in the next block north of $0.30.

“Ethereum’s price drop has lead to massive network congestion. ETH median gas price just spiked to 29 gwei – the highest it’s been in over 1 year,” noted crypto analysis company Glassnode.

Source: @glassnode

Similar spikes in gas prices have been seen during bouts of volatility in the past as well.

Apart from the gas price, the Ethereum Network is also having a considerable backlog, clogging transactions for as much as an hour and more. As per Etherscan, unconfirmed transactions on the Ethereum network jumped to 120k today, for which reportedly ERC20-based Tether (USDT), which crypto exchange Binance disabled for a short amount of time and DAI liquidations are responsible.

To run things faster, Binance increased the ETH withdrawal fees by 100% and ERC20 withdrawal fee by 66%.

“To better facilitate ERC20 and ETH withdrawals during this period of high congestion on the ETH network, we are making the following temporary adjustments: ETH withdrawal 0.003 ETH is now 0.006 ETH. ERC20 withdrawal 0.006 ETH is now 0.01 ETH. Withdrawals will re-open shortly,” announced the exchange.

Liquidation issues

Another impact of this price crash has been on the Decentralized Finance products (DeFi). The decline in Ether price caused liquidations of DeFi derivatives trading and collateralized debt.

As the network is congested, it means it is taking time for the collateral to get liquidated. With a dominance of 58% in DeFi, it affected the Maker users. MakerDAO participants are advised to repay, pay back debt, or add more collateral to increase their ratio.

For automation users, DeFi Saver, a management solution for decentralized finance protocols said they “cannot provide any guarantees regarding outcomes” in a scenario where the price in a user’s MakerDao drops below their liquidation price.

Not just in bear markets but in booming periods as well, Ethereum Network has gotten congested.

One positive thing that happened during today’s bloodbath is an increment of 6.7% in the ETH locked in DeFi. It yet again jumped above 3 million, according to DeFi Pulse.