Why This “Whale” Thinks Ethereum Could Soon Be “Better Digital Gold” than Bitcoin

https://cryptonewmedia.press/why-this-whale-thinks-ethereum-could-soon-be-better-digital-gold-than-bitcoin/

Bitcoin and Ethereum are rarely compared beyond when discussing market structures and price trends, with their underlying fundamental values being wildly different.

While Bitcoin is seen as a store of value and a “digital gold,” Ethereum is widely thought to be more of an ecosystem backbone. The vast majority of the actively used crypto space is run through the Ethereum blockchain.

The gap between the two cryptocurrencies in terms of underlying similarities may begin shrinking in the near-term, however, as one early Ethereum investor, who is a purported “whale,” is noting that two changes to the ETH network could soon make it a “better digital gold than BTC.”

These comments came about during a discussion regarding the lack of institutional involvement in ETH, which he believes will soon change.

He is specifically pointing to Ethereum Improvement Proposal 1559 and the Proof-of-Stake consensus system incorporated under ETH 2.0 as reasons why the token will soon inherent gold-like properties.

These two factors will help ETH become scarcer and have negative inflation, giving rise to a serious price increase in the mid-term.

Ethereum Underperforms Bitcoin as Institutions Drive Ongoing Rally

It is widely thought that institutions and “smart money” are driving the ongoing Bitcoin rally.

The cryptocurrency has been caught within an intense uptrend that has allowed it to stabilize around $18,000. The selling pressure here has proven to be quite intense, but it appears that bulls are prevailing.

While BTC is just a stone’s throw away from setting fresh all-time highs, Ethereum is still stuck below its 2020 highs of $490 and has a long way to go before reaching its 2017 highs of over $1,000.

Its underperformance of BTC may be coming about due to institutions driving this Bitcoin upswing and buying the crypto because of the “digital gold” narrative.

ETH Whale Claims It Will Soon Flip Bitcoin as the Superior Digital Gold

Tetranode, a supposed Ethereum whale who acquired his position around $1.00, explained in a tweet that he believes the negative inflation that will come about as a result of PoS issuance and EIP-1559 will allow ETH to flip Bitcoin as a superior digital gold.

“It will be better digital gold than BTC. EIP-1559 + only PoS issuance… good chance effective inflation is negative. Institutions don’t like uncertainty, they want to see it live, so they will have to wait for $10,000 ETH… just like how they waited for $10,000 BTC.”

If these network changes ignite a narrative regarding Ethereum being a store of value, it could see large inflows from institutions who want to diversify across multiple digital assets.

Featured image from Unsplash.
ETHUSD pricing data from TradingView.

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This crypto fund just bought $10m in Chainlink (LINK) during last night’s flash dip

https://cryptonewmedia.press/this-crypto-fund-just-bought-10m-in-chainlink-link-during-last-nights-flash-dip/

What’s beautiful and kind of scary about DeFi is that everything is on-chain: if you know someone’s address, you can track their investments and their other interactions with the Ethereum ecosystem.

Due to the fact that you can time announcements of investments with transactions, it becomes somewhat trivial sometimes to connect addresses and funds and investors in the space.

I was watching Three Arrows Capital’s primary address last night and noticed that on the dip, the crypto fund accumulated a large amount of LINK.

Three Arrows Capital accumulates a mass amount of LINK

Three Arrows Capital is by far one of the biggest funds in the space: they hold hundreds of millions worth of Grayscale Bitcoin Trust shares, hold a large chunk of the likely multi-billion-dollar-exchange Deribit, and have countless other investments in the space.

They’re big Chainlink (LINK) holders too, apparently.

Last night, when Bitcoin flash crashed by approximately $1,000 in the span of a minute, big bids were put up across all cryptocurrencies.

LINK, for instance, fell from $14.00 to $12.50 in that frame of time, but bounced quickly back toward pre-crash levels.

Bidding the dip, seemingly, was Three Arrows Capital.

Minutes after the dip took place, the firm received 351,147 LINK from an address that received a Binance withdrawal. Around fifty minutes later, another 400,000 LINK was received for a total of 751,147 LINK, valued around $10,100,000. You can see the transactions below.

Su Zhu, CIO and CEO of Three Arrows Capital, liked the tweet I shared to my feed about the transactions.

Was that a confirmation?

As of this article’s writing, Three Arrows Capital holds approximately $14 million LINK on that one address, which is currently being lent to Aave. The collateral is subsequently being used to borrow stablecoins.

Not the only VC accumulator

Three Arrows Capital is far from the only fund that is accumulating a large amount of Ethereum-based coins.

Jump Trading, a massive proprietary trading firm based in Chicago has over $18.5 million worth of Ethereum, along with millions in Serum, Compound, Keep Network, and HXRO. The firm also has assorted investments in Numeraire, Orchid, Maker, and Huobi Token.

As they are market makers, it is unclear what exactly this means for the investments they are making. Though, it appears that the investments in SRM, Keep Network, and some of the other coins are longer-term plays as opposed to hedges.

Polychain Capital has also been going big on Yearn.finance (YFI) as we’ve covered previously. The firm owns approximately two percent of all of the coin in circulation.

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Moonbeam Upgraded Their Structure to Onboard Ethereum Developers

https://cryptonewmedia.press/moonbeam-upgraded-their-structure-to-onboard-ethereum-developers/

Moonbeam has released its Alpha v3 test net, and the latest build throws a bone to Ethereum developers who’ve been eyeing the Polkadot space with interest. Newly rolled out functionality unifies accounts and simplifies interacting with the test net, making it easier for Ethereum devs to get involved, while enhancing the user experience to boot.


Moonbeam Smiles Kindly on Ethereum

Alpha v3 is the latest and greatest version of Moonbeam, having been developed by smart contract specialist PureStake. A number of changes have been implemented under the hood, but the biggest change from the perspective of Ethereum devs is the updated account system that now looks a lot more like that of the Solidity framework they’re accustomed to.

The idea with Moonbeam is that it simplifies the complexity associated with porting a project from Ethereum over to Polkadot. Since the two networks have different programming languages and compilers, it’s a task that’s not for the faint-hearted. Moonbeam wants to change all that by reducing the number of changes that must be made to Solidity smart contracts to ensure Polkadot compatibility. Deployment tools such as Truffle and Remix are utilized by Moonbeam to achieve this.

Fewer Keys, More Ease

With the Alpha v3 test net, Moonbeam has done away with requirements for developers and token holders to control dual private keys and wallet addresses: one account now does it all across both ecosystems. As a result, users can interact with dApps that have been implemented in the Moonbeam EVM using a single account, just like Ethereum. This same account also enables Substrate-based tasks such as staking and on-chain voting to be undertaken. Essentially, it enables devs and users to enjoy the best of both worlds: the familiarity of Ethereum’s account-based system and the utility of Polkadot’s Substrate-based empire.

Why Moonbeam Matters

For Polkadot to realize its lofty goal of bringing defi – and everything else that matters in crypto – to its network of interoperable parachains, it needs to convince developers to switch. If enough Ethereum developers can be encouraged to gravitate to Polkadot, the users will follow, goes the theory. Particularly so if the learning curve for new Polkadot users is as gentle as possible. This means providing tooling that mirrors that of the environment they’re accustomed to: think Ethereum web wallets like MetaMask, and AMMs like Uniswap.

At the developer level, similar tooling is needed, in this case, to make smart contracts are written in Solidity easier to adapt to the Substrate world of Polkadot. Moonbeam’s Ethereum-compatible smart contract para chain offers a jumping-off point for devs who are Solidity specialists but Substrate newbs. It also offers a way for ERC20 assets to be represented on Polkadot. As such, anticipation is high for Moonbeam and the impending launch of its mainnet. If the platform created by PureStake lives up to expectations, it will open the flood gates to a wave of existing defi projects intent on building on Polkadot.


Disclaimer: The information presented here does not constitute investment advice or an offer to invest. The statements, views, and opinions expressed in this article are solely those of the author/company and do not represent those of Bitcoinist. We strongly advise our readers to DYOR before investing in any cryptocurrency, blockchain project, or ICO, particularly those that guarantee profits. Furthermore, Bitcoinist does not guarantee or imply that the cryptocurrencies or projects published are legal in any specific reader’s location. It is the reader’s responsibility to know the laws regarding cryptocurrencies and ICOs in his or her country.

 

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No one is safe: Ethereum DeFi protocol by PayPal co-founder exploited for $7.5m

https://cryptonewmedia.press/no-one-is-safe-ethereum-defi-protocol-by-paypal-co-founder-exploited-for-7-5m/

No one is safe from the ever-growing wave of decentralized finance (DeFi) exploits, not even prominent technologists and investors.

Today, an up-and-coming DeFi protocol built on Ethereum by prominent Silicon Valley developers such as Yu Pan, a founding member of PayPal and the earliest Youtube employee, was attacked with a flash loan.

This is the fifth flash loan attack of the past three weeks, making it clear that this is an issue that all Ethereum users should be aware of.

OriginUSD hacked for $7.5 million in ETH and DAI

On Monday evening, a suspicious transaction was spotted by many users on Twitter. At first, few knew what had happened: this unknown user had withdrawn 70,000 ETH from dYdX, an Ethereum decentralized exchange, as a flash loan, then used those funds to withdraw millions in stablecoins.

Some thought it was a normal arbitrage, but I suggested it was a flash loan exploit on a yield aggregator protocol.

The reason why I thought so was that the account affiliated with this suspicious transaction had sent millions worth of DAI and Ethereum from the flash loan transaction to his own address, implying that he made a profit. It was also clear that the transaction involved Origin USD (OUSD), a meta-stablecoin that natively yields interest to holders.

In all $7.5 million worth of funds were taken from the protocol, which was all the funds in the Origin pool at the time. The attacker immediately began to try and wash the funds, withdrawing $2 million worth of RenBTC into Bitcoin proper, then converting the censorable stablecoins into ETH and DAI.

This attack wasn’t fully confirmed by the team until hours later, when Origin’s co-founders shared the following blog online:

According to them, what had happened was a “reentrancy bug.” A reentrancy bug is an infamous type of Ethereum smart contract exploit that basically allows someone to pretend they deposited a coin without actually depositing that coin.  In basic terms, it’s like double-spending BTC.

The bug allowed the attacker to mint a large number of OUSD tokens without them having the stablecoins to back them. This allowed them to subsequently withdraw more coins in the pool than those they deposited.

The Origin team will be working nonstop to try and make affected users whole:

“We will be taking exhaustive measures in the next few days in an attempt to recover lost user funds before discussing a compensation plan for affected OUSD holders.”

What makes this notable is that this is the fifth flash loan attack of the past three weeks.

We covered many of these attacks, including the one that took place just last week on Akropolis, and another that took place this weekend on Value DeFi. 

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This Indicator Shows Ethereum is Structurally Similar to Where BTC Was in 2016

https://cryptonewmedia.press/this-indicator-shows-ethereum-is-structurally-similar-to-where-btc-was-in-2016/

  • Bitcoin and the aggregated cryptocurrency market have been leading altcoins higher, with Ethereum showing some immense signs of strength as it once again breaks $470
  • The broader crypto market is getting stronger, as altcoins are now rallying in tandem with BTC or closely following it
  • If this trend persists, then investor sentiment and risk appetite may continue growing, leading more investors to rotate capital into higher beta assets
  • This possibility is already coming to fruition, as all the blue-chip DeFi tokens have been surging throughout the past week
  • One analyst is noting that Ethereum may aid in this market-wide uptrend, as one reliable indicator he is watching is flashing some bullish signs

Bitcoin and the aggregated crypto market are pushing higher today, with Ethereum leading altcoins to retest their key resistance levels.

ETH is still underperforming Bitcoin heavily over a macro timeframe, but there is a chance that it will soon fly past $500 and post even further gains if the altcoin market remains strong.

In many ways – at least from a technical perspective – Ethereum is the altcoin market’s backbone.

This could be good for the higher risk tokens, as one analyst is noting that ETH’s high time frame RSI is flashing signs similar to those seen by Bitcoin in 2016 – before it posted a massive bull rally.

Ethereum Rallies as Bitcoin Lifts Market Higher

At the time of writing, Ethereum is trading up just under 2% at its current price of $471.

It still has a way to go before it can shatter the resistance it faces at $500 – which will likely be a strong resistance level.

A break above this level would allow it to gain ground against Bitcoin and likely spark a second wave of altseason.

Analyst Claims ETH’s RSI is Similar to That Seen by Bitcoin in 2016

One trader stated that Ethereum’s high time frame RSI is similar to that seen by Bitcoin in 2016.

This means that it could soon be entering into a parabolic phase that results in exponential gains.

“More than PA i’m focusing my analysis on monthly RSI. Comparing it with 2016 BTC we have a very similar RSI structure. Once more this confirms that $ETH is primed for an imminent breakout.”

Image Courtesy of Wolf. Source: ETHUSD on TradingView.

If Ethereum’s macro price action unfolds the way it could, based on the above analysis, then this may truly be the early stages of the next market-wide bull run that garners global attention.

Featured image from Unsplash.
Charts from TradingView.

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Ethereum vs. Binance Smart Chain: Who wins in a crypto DeFi battle?

https://cryptonewmedia.press/ethereum-vs-binance-smart-chain-who-wins-in-a-crypto-defi-battle/

The decentralized finance market has reinvigorated the crypto space from a brutal three-year-bear slumber, with the market now moving towards real-world solutions such as non-custodial lending, loans, credit, and away from just acting as a proxy for digital payments.

But where there is technology, there is competition. Ethereum’s laggard blockchain — which has attracted flak for being slow, unscalable in its current form, and encounters high fees during times of demand — has opened up the gates for competitors promising faster deployment, minimal fees, and an overall better blockchain for dApps.

Binance Smart Chain (BSC) is one such blockchain alternative to Ethereum. Maintained and developed by the billion-dollar worth crypto exchange Binance, the blockchain offers a fast environment for developers to deploy dApps and charges only a few cents per transaction, as products like BakerySwap, PancakeSwap, and others have shown.

But does it triumph over Ethereum? Cryptonites host Alex Fazel caught up with SwissBorg co-founder Anthony Lesiosmier this week to discuss just that.

Binance Smart Chain
Image: Cryptonites

Lesiosmier, a veteran of the crypto markets and a former institutional equity trader, oversees operations and security across SwissBorg’s wealth management ecosystem and related services, such as earning yield on stablecoins and other cryptocurrencies from within the app!

Here’s what they discussed.

On the speed and scalability of Binance Smart Chain

Lesiosmier started out by analyzing the unique smart contract users on Ethereum and BSC, finding out that while the former boasts a figure of over 40 million, the latter’s 300,000 unique addresses (considering its launch five years after Ethereum) was a sign of quick growth and activity.

Fazel chimed in, noting:

“We know that the Ethereum blockchain already has $12 billion AUM, but we have 300 (unique) projects built on Ethereum, but already 30 projects built on the Binance Smart Chain.”

Interestingly, BSC was first built on an Ethereum client, noted Lesiosmier, making it possible to easily shift assets and services from Ethereum to BSC and thus increasing its appeal among both users and developers.

“They do not have to create a new community of developers. If you know how to code on Solidity, a development language, then you can do the same on the BSC,” said Lesiosmier.

He added:

“And I think that’s very smart because we’ve seen blockchains such as Avalanche, Polkadot and there are many examples in this space, but one of the biggest challenges of all these new blockchains is that while the “engine” of the blockchain itself is better than Ethereum, they don’t have the same community.”

Despite the benefits, BSC has faced flak for being a “centralized” blockchain, compromising that aspect for offering better speed and scalability for users. But Lesiosmier noted the security of Ethereum made Binance’s move worthwhile — especially as the former has seen zero smart contract failures while handling billions of dollars worth of assets.

Yield farming (and risk management)

The duo then dove into the yield farming sub-sector, which had its five mins of fame in July-August but since fizzled out. For the uninitiated, this sees users lock up capital on Ethereum-based projects that is then lent out to other users on interest, with the stakers, in turn, receiving a part of the interest rates.

To illustrate, Lesiosmier set up a farm on BSC-based project PancakeSwap and showed the earnings trickling to his balance on-screen in real-time. The cost? A few cents. (Compared to a few dollars or even hundreds of dollars on Ethereum based on network demand.)

The SwissBorg CSO even explained how multiple farms, such as Cream Finance and others, can actually be used to deposit BNB, earn interest on that, and simultaneously burrow from Cream to farm “riskier” pools. This serves as much-needed risk management and allows users to diversify their funds.

In the end, (warning: spoilers ahead), Lesiosmier suggested that while the Ethereum developers are pioneering newer products and leading in innovative tools for users, they must look to develop things on BSC, for the various reasons listed above instead of shunning the protocol entirely.

(The above is part of an insightful 54-minute Cryptonites interview available for streaming in full below. It has been edited for clarity and brevity.)

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Here’s Why Bitcoin’s Upside May Be “Capped” Relative to Ethereum

https://cryptonewmedia.press/heres-why-bitcoins-upside-may-be-capped-relative-to-ethereum/

  • Ethereum has been able to catch up to some of the gains posted by Bitcoin as of late, but it still has a long way to go before it breaks its trend of underperformance
  • Yesterday, the cryptocurrency saw a swift rally past $460 that came about in the absence of any BTC movement
  • This was a promising push higher, and it has yet to surrender much of these gains
  • One analyst is now looking towards $500 as a critical level to break
  • He notes that a 10% move higher will lead ETH above this level and make it a far better value play than BTC

Ethereum has seen some immense strength throughout the past few days, rallying independently of Bitcoin as the aggregated DeFi sector shows signs of catching a second wave of momentum.

If DeFi tokens continue their ascents and rekindle the farming craze, it could drive massive demand to the Ethereum network – in turn enhancing the cryptocurrency’s fundamental strength.

One trader is watching for ETH to begin outperforming BTC if it can break above $500. He notes that a break above this level would spark some serious upside.

He also added that, at the moment, Bitcoin’s upside might be “relatively capped” as compared to that of Ethereum.

Ethereum Holds Above $460 as Uptrend Stalls 

Yesterday, Ethereum saw a massive push higher that led it up to $465. This momentum rapidly stalled, and ETH has yet to break its weekly highs of $469 set just four days ago.

At the time of writing, ETH is trading up just over 2% at its current price of $461. Its steady advance has been positive, but it still has multiple hurdles to surmount before it can break $500.

There appears to be massive resistance around $470, as well as $490. Once these two levels are shattered, it’s open skies for the crypto.

Legendary Trader: BTC Upside Potentially Capped Compared to That of ETH

One legendary pseudonymous trader, known for his massive seven-figure Bitcoin bets, stated in a recent tweet that he believes Bitcoin’s upside may be capped compared to Ethereum.

However, he believes that breaking $500 is crucial for this to be a tradeable sentiment.

“Think BTC upside might be relatively capped when compared to ETH if ETH is able to break 500…”

Image Courtesy of Flood. Source: ETHUSD on TradingView.

Unless Ethereum fails to break above its near-term resistance levels, its upside potential is quite significant.

Featured image from Unsplash.
Charts from TradingView.

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Why The Ethereum 2.0 Dream is Unravelling Before Our Eyes

https://cryptonewmedia.press/why-the-ethereum-2-0-dream-is-unravelling-before-our-eyes/

No one said Ethereum’s transition to a Proof-of-Stake (PoS) consensus mechanism would be easy. But few could have predicted what we are witnessing today.

The Phase 0 launch is already close to a year behind its initial rollout date of January 2020. Delay after delay, not to mention several failed testnets, illustrates the scale and scope of work required to make ETH 2.0 a reality.

Last week, the community finally got the news they were waiting for, a confirmed rollout date of December 1.

However, before Phase 0 can launch on that date, the mainnet staking address must have at least 524,288 Ether deposited by November 24.

“To trigger genesis at this time, there must be at least 16384 32-ETH validator deposits 7 days prior to December 1. If not, genesis will be triggered 7 days after this threshold has been met (whenever that may be).”

So far, participation has been poor, leading many to wonder if Ethereum 2.0 is dead before it started.

Ethereum Staking Deposits Nudge Past 10% of Threshold Requirement

Analysis of the mainnet deposit contract address shows a total number of 53,025 Ether staked at present. Or just over 10% of the required threshold amount.

Ethereum mainnet deposit staking address
Source: etherscan.io

With just under two weeks to go before the November 24 deadline, the likelihood of a rollout on December 1 looks bleak.

Part of the reason why is because Ethereum staked at this early stage is locked up until Phase 1.5 launches. Although there’s no firm date of when that will be, some estimate it’s at least two years away.

With that in mind, some would say the developers overestimated people’s willingness to lock approximately $15k away for two years, maybe longer.

But that’s not all. As the deadline date moves closer, it’s becoming apparent that miners don’t want to transition to a PoS system.

What About The Miners?

Ethereum’s current Proof-of-Work (PoW) consensus mechanism relies on miners to select and then write transactions into the blockchain.

Doing so yields mining reward, which can be highly profitable due to the auction-style fee mechanism employed by the Ethereum blockchain.

This year’s peak, the week to August 31, saw mining rewards of 38,437 ETH, or approximately $18.3 million at the time.

Ethereum mining rewards

Ethereum mining rewards
Source: etherchain.org

As such, it’s difficult to imagine miners giving up their mining rewards without any hesitation.

Under a PoS system, stake pool operators, the equivalent of miners in a PoS system, are selected at random to write blocks. There is no cherry-picking of profitable transactions.

Successfully completing a block yields a reward for the entire staking pool. This means the reward is split between the stake pool operator and all of the stakers.

In short, block writers have less control under a PoS system, compared to a PoW system, and less scope to maximize profits.

One Ethereum miner commented on the low amounts of Ether staked so far by saying:

“A lot of us ETH miners aren’t staking, because that means accelerating the end of ETH mining. So, by us not staking, we are saying quite a bit.”

Despite that, @TheCryptoLark believes it’s still early days. He expects the ETH 2.0 staking pool to fill out closer to the deadline date.

Ethereum daily chart

Ethereum daily chart
Source: ETHUSDT on TradingView.com

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3 Reasons Ethereum’s Future Hangs in Balance Over EIP 1559 Reform

https://cryptonewmedia.press/3-reasons-ethereums-future-hangs-in-balance-over-eip-1559-reform/

If there’s one thing this summer’s DeFi boom taught us, it’s that the Ethereum gas fee structure needs reform.

Although things have calmed down since the summer, rip off fees, and stuck transactions are still a problem for Ethereum users. So much so, a failure to address the problem will only give rival blockchains an edge in stealing market share.

The issue comes down to Ethereum’s auction transaction pricing mechanism. Under this system, users are encouraged to outbid others to get their transactions mined onto the blockchain quicker.

This incentivizes miners to fill new blocks with transactions that make them the most money. As such, the auction system leads to “bidding wars” of ever-increasing gas fees. Also, the knock-on effect sees low-profit transactions left in the network queue.

Core developers are well aware of the problem. Their response is the Ethereum Improvement Proposal (EIP) 1559, which looks to tackle the fee mechanism.

While prominent figures in the Ethereum community support EIP 1559, it’s unclear whether this proposal will make it into “production.” Especially considering the funding needed, as well as the extensive testing and development work required.

This unique situation has no easy answers. Developers can do nothing with it and wait for ETH 2.0 but risk losing market share in the process. Or they can pour resources into implementing EIP 1559, which could delay ETH 2.0 further, only for that work to be invalidated in the future anyway.

Ethereum Users Want Change

As mentioned, it’s no fun paying over the odds while transactions remain pending.

At the more extreme end of this, a Reddit user recently took to the social media platform to share their experience of spending $9,500 for a $120 transaction.

@ProudBitcoiner states that they accidentally typed an incorrect amount in the MetaMask “Gas Price” field, which led to the overpayment.

“Metamask didn’t populate the “Gas Limit” field with the correct amount in my previous transaction and that transaction failed, so I decided to change it manually in the next transaction (this one), but instead of typing 200000 in “Gas Limit” input field, I wrote it on the “Gas Price” input field, so I payed 200000 GWEI for this transaction and destroyed my life :/”

This experience highlights the lack of controls in place to curb miners’ greed.

Under EIP 1559, this situation would not happen as the pricing mechanism works by way of a fixed-per-block network fee. Not an auction system as we have at present.

What’s more, a fee cap mechanism means users set a maximum price they are willing to pay. This amount covers both the “miners’ bribe” and the block reward fee.

Without the implementation of EIP 1559, not only does miners’ greed determine blockchain dynamics, but incidents, such as what happened to @ProudBitcoiner, are destined to continue in the future.

EIP 1559 Adds Deflationary Mechanism

EIP 1559 also proposes a change to Ethereum’s monetary policy. Under this proposal, the burning of the base fee will lower the supply of Ether as a function of its usage.

“An important aspect of this fee system is that miners only get to keep the miner bribe. The base fee is always burned (i.e. it is destroyed by the protocol). Burning this is important because it removes miner incentive to manipulate the fee in order to extract more fees from users.”

As such, network activity could directly affect Ethereum’s price by adding scarcity into the mix.

@Pentoshi commented that this would have a similar effect as Bitcoin’s halving, but, as he puts it, “just without the label.”

Without EIP 1559, some would argue that market dynamics would hinder true price discovery.

ETH 2.0 Supercedes Old Proof-of-Work System

Although the benefits of EIP 1559 are clear, what isn’t is how it would operate in conjunction with Ethereum 2.0. More so, if the effort in implementing it is “worth the squeeze”

The Founder of StealthMail, Evgen Verzun raised that the point that Ethereum 1.0 is not supposed to be permanent. He said Ethereum, as a Proof-of-Work blockchain run by mining algorithms, is being phased out.

With that in mind, is the work that will go into EIP 1559 a smart use of resources?

One thing’s for sure, whichever way the Ethereum Foundation leans, a barrage of criticism will come from the opposing camp.

Ethereum daily chart
Source: ETHUSDT on TradingView.com

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How Staking Apathy Could Spell Doom For Ethereum 2.0

https://cryptonewmedia.press/how-staking-apathy-could-spell-doom-for-ethereum-2-0/

Although Bitcoin has dominated the headlines of late, Ethereum has also rallied hard. Since the beginning of October, the second-biggest cryptocurrency by market cap is up 32% to $457 at the time of writing.

What’s more, unlike Bitcoin, sustainable fundamental factors, i.e. improvements to the Ethereum blockchain, seem to be behind the buying spree.

Alex Saunders of Nugget’s News noted that Ethereum’s weekly close yesterday was the highest since July 2018.

He attributes this with progress on Ethereum 2.0, in particular with Ether staking coming on line. And with a lack of resistance, on the higher weekly time frame at least, the upside potential from here on out is huge.

However, despite the progress made on ETH 2.0, a lack of interest in Ether staking indicates possible trouble ahead for Ethereum.

Ethereum 2.0 Finally Drops Roll-Out Date

Following months of failed testnets and speculative dates, the Ethereum Foundation finally dropped December 1 as the confirmed roll-out date.

For this to happen, a week before December 1, the mainnet deposit contract address must receive 32-ETH deposits from 16,384 or more validators. Or 524,288 Ether in total.

Otherwise, the Phase 0 roll-out will get delayed for another week.

“To trigger genesis at this time, there must be at least 16384 32-ETH validator deposits 7 days prior to December 1. If not, genesis will be triggered 7 days after this threshold has been met (whenever that may be).”

Doing his part to launch on time, Ethereum Co-founder Vitalik Buterin sent 3,200 Ether, worth approximately $1.5 million, to the mainnet deposit address.

Nonetheless, an analysis of the mainnet contract address shows a distinct lack of interest from Ethereum holders.

Currently, 49,377 Ether has been sent to the mainnet deposit contract. This is less than 10% of the required threshold amount. With less than two and a half weeks to go before the deadline date, the possibility of a week-long delay is high.

Etherscan of Ethereum mainnet deposit contract address
Source: etherscan.io

Out of Touch Staking Criteria Puts Investors Off

Staking 32-Ether, or approximately $15k, is a big ask for most investors. Especially so considering the low barrier to entry for other blockchain projects.

With Cardano, it’s possible to stake just 1 ADA, or $0.10, as long as there is enough ADA in the wallet to pay the (inexpensive) staking fee.

The story is much the same with Zilliqa, who asks for a minimum staking amount of 10 ZIL, or $0.18. Plus, in a nod to DeFi mechanics, stakers get to earn the Zilliqa GZIL governance token on top.

What’s more, staking Ether during the Phase 0 stage means locking up those Ether until Phase 1.5 launches. While there is no definitive date on when that would be, it’s likely to be more than two years away.

“once the beacon chain is live, you’ll be able to stake your real ETH. However, staking in Phase 0 is a one-way transaction. You won’t be able to withdraw your ETH until the current chain becomes a shard of Eth2 in Phase 1.5.”

With all of these factors in mind, it’s no surprise that Ether staking deposits have been low. The question is, how will this affect the price of Ethereum going forward?

Ethereum daily chart

Ethereum daily chart
Source: ETHUSDT on TradingView.com

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Only 232 Addresses Have Deposited Ethereum in ETH2 Thus Far

https://cryptonewmedia.press/only-232-addresses-have-deposited-ethereum-in-eth2-thus-far/

There were fears that Ethereum 2.0 (ETH2 or Serenity) was going to be delayed once again. Danny Ryan, an Ethereum Foundation researcher, said in a podcast in the middle of October:

“This library is critical to creating keys, signing messages. Critical, in early phases, [means] that if you use this library, they need to be secure; if you use it to generate your wallets, it needs to have good randomness; and if you are signing your deposits which have a signature associated, it needs to be correct. Given how critical this library is, and given that, if there is a fundamental error in this library we could f*ck some sh*t up in terms of genesis deposits, that is the blocker.”

Fortunately, the ETH2 deposit contract was recently released by developers. The deposit contract will facilitate a transfer of Ethereum from the original blockchain to the new one.

Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom

Ethereum 2.0 Progress Update

Last week, the Ethereum 2.0 deposit contract was released. Investors could deposit ETH in this contract, which will allow depositors to claim ETH2 on the second network once it goes live.

While there is some uncertainty about the exact yields depositors will get by doing so, there has been much Ethereum deposited in the contract.

According to crypto-asset and Ethereum-focused analytics firm Dune Analytics, 47.7k ETH has been sent to the deposit contract over the past few days. That is 9% of the 524,000 ETH threshold needed to launch this network.

There have only been 232 depositors who have deposited coins into the contract thus far. Some have said that due to there being uncertainty about the yields offered and if the funds will be entirely safe, retail investors are hesitant to deposit. There is also the complication of setting up a validator node for ETH2, which may be preventing further investment.

Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin

Vitalik Buterin Makes Big Deposits

Vitalik Buterin has been one of the key participants in this contract.

Analysts online noted that one of Vitalik Buterin’s known addresses has deposited 3,200 ETH, meaning enough coins for 100 validators, into the contract.

In Buterin’s address, there remains $2.5 million worth of Ethereum. It is unclear if he will continue depositing those coins into the deposit contract.

There are other whales participating in the deposit contract as well, though it isn’t 100% clear who exactly these individuals are.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
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Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Only 232 Addresses Have Deposited Ethereum in ETH2 Thus Far

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Ethereum Social Sentiment Surges as Staking Starts

https://cryptonewmedia.press/ethereum-social-sentiment-surges-as-staking-starts/

Ethereum is one of the best performing crypto assets of the day, albeit behind its big brother. ETH prices got their initial boost on November 4 when the deposit contract was officially deployed. The asset rose 5% on the back of that to reach $405.

Bitcoin is a bigger driver of momentum for ETH prices as today’s 8% surge to $440 illustrates. Either way, social engagement for Ethereum has cranked over the past day or two according to analytics from LunarCrush.

Ethereum Staking Taking Off

This trend is likely to continue as staking gains popularity during Ethereum’s gradual shift to ETH 2.0 and the proof-of-stake consensus. Since it was officially announced earlier this week, 33,125 ETH has been staked on the smart contract according to the Eth 2 Launchpad.

At today’s prices that works out at $14.2 million. In order for Phase 0 to launch with the Beacon Chain genesis, there needs to be a minimum threshold of 16,384 validators depositing 32 ETH to total 524,288 ETH seven days in advance.

Developers have suggested that this will occur in early December. Currently, the network is 6.3% towards its total so a further $211 million worth of ETH is required.

Ethereum co-founder Vitalik Buterin made his contribution of 3200 ETH, worth around $1.37 million, as noted by Ethhub founder Anthony Sassano.

Sentiment for staking is growing even though initial participation has been slow to take off. It is likely that the majority of ETH holders are waiting for the Beacon Chain to launch and run without issue for a few months before staking their bags.

Additionally, staked ETH must be locked up for at least a year so there may be better earning opportunities and more financial flexibility in DeFi.

ETH Price Update

Ethereum has retreated slightly from its two month high of $440 a couple of hours ago pulling back below $430 but it appears to be regaining momentum at the time of writing.

There is very little resistance all the way up to the 2020 high of $480 so if ETH can break above current levels things are likely to move quickly. On the down side there is support at $420 and stronger support at $380.

All eyes are on Bitcoin at the moment though and Ethereum is still moving within its shadow.

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Ethereum is Stuck Below a Crucial Level, But Analysts Aren’t Worried

https://cryptonewmedia.press/ethereum-is-stuck-below-a-crucial-level-but-analysts-arent-worried/

  • Ethereum has been struggling to match the bullish price action seen by Bitcoin as of late, which has led it to consolidate around $380
  • The past couple of days have been no exception, and the cryptocurrency has yet to gain any bullish momentum despite BTC pushing against $14,000
  • It remains unclear as to when there will be an impetus for investors to rotate capital away from BTC and into ETH
  • Once this does occur, however, ETH could see some major gains in a short period of time
  • One trader believes that $390 is the key level to watch in the near-term

Ethereum and the rest of the crypto market – except for Bitcoin – have struggled to gain any momentum over the past few days and weeks.

The stagnant price action seen by ETH also comes amidst the phase 0 rollout of Ethereum 2.0 – which was widely expected to be a catalyst for upside.

That being said, its inability to rally so far indicates that some underlying weakness plagues it.

One analyst is noting that this weakness will likely persist until it can break above $390. He contends that a break above this level will allow it to rally and catch up to Bitcoin.

Ethereum Struggles to Gain Momentum as Sideways Trading Persists

At the time of writing, Ethereum is trading down just under 2% at its current price of $380. This is around where it has been trading throughout the past few days and weeks.

Its inability to gain any directionality has been somewhat surprising, as the cryptocurrency has broken its correlation to Bitcoin for the first time in a long time.

There is a chance that some downside will be seen in the coming few days if bulls are unable to step up and propel it higher, as even the early stage of the 2.0 rollout hasn’t catalyzed any momentum.

Analyst Claims $390 is Crucial to Surmount 

While sharing his thoughts on where Ethereum might trend next, one analyst explained that $390 is a crucial level to watch closely in the near-term.

He believes a break above it could send it flying past $400.

“ETH / USD: I don’t short Ethereum because im not a moron, that said currently PA needs to get above and flip $390 into support for us to start heading higher, seems to be that price as gotten comfortable below $400 recently… Thinking that tomorrow we could see $400+. Send it.”

Image Courtesy of Cactus. Source: ETHUSD on TradingView.

If this rally does take place, it could also create a tailwind that carries some smaller altcoins higher as well.

Featured image from Unsplash.
Charts from TradingView.

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