Ethereum

GameFi Innovator Discusses Ethereum Scalability Challenges and Future Solutions

Published

8 months ago

5 June, 2024

ETH team lead says most ETH clients ‘very aggressively’ delete old data

Speaking to crypto.news, Roman Levi, CTO of Playnance, shared his views on Ethereum’s scalability challenges and emerging solutions that could address these issues.

Ethereum has long been at the forefront of blockchain technology, emphasizing security and decentralization. However, as the digital landscape evolves, so does the challenge of maintaining scalability without compromising its core principles.

High transaction fees and slower processing times are increasingly pushing users and developers towards more effective alternatives. The persistent search for a balance between fundamentals and performance is a central theme for Ethereum. explore solutions like partitioning and rollups.

Amidst this, competitors like Solana and Polkadot, among others, are introducing innovative architectural paradigms that promise greater scalability and efficiency. Solana’s remarkable transaction speed and Polkadot’s parallel chain model are just a few examples that highlight the growing need for Ethereum to adapt and evolve to maintain its leadership position.

As Ethereum continues to integrate advanced layer 2 solutions and capitalize on recent upgrades, such as the transition to a proof-of-stake consensus mechanism, the central question remains: can these technological advances achieve the required scalability without sacrificing the fundamental principles of decentralization and security of the network ?

Levi had some interesting views.

Ethereum is known for prioritizing security and decentralization, often at the expense of scalability. Are there emerging solutions or innovations, such as sharding, rollups, or other layer 2 technologies, that can effectively address these scalability challenges without compromising Ethereum’s core principles?

Validity rollups present a promising solution to Ethereum’s scalability issues. They execute transactions off-chain, package them into a single proof, and submit that proof to the Ethereum mainnet for verification and settlement. This off-chain computing improves scalability while preserving Ethereum’s core principles of decentralization, permissionless transactions, and openness. Newer blockchain technologies, like account abstraction, can also be of great help. For example, AA decouples the wallet from the private key, allowing users to effectively use smart contracts as accounts. The combination of account abstraction and Layer 3 technologies can become a powerful enabler for Web3. With most in-app actions processed off-chain, the main chain experiences reduced network loads and higher throughput.

Looking at the landscape, Ethereum is not the only player in the scalability game. How do Ethereum’s strategies compare to those of emerging powers like Solana and Polkadot?

Solana uses a proof-of-history consensus mechanism, which timestamps transactions to improve speed and efficiency, processing thousands of transactions per second. However, this compromises decentralization. On the other hand, Polkadot uses a heterogeneous multi-chain framework, allowing parachains to operate in parallel and share security through a master relay chain, which requires robust governance. Ethereum remains committed to its core values through solutions such as validity rollups and ZK-Rollups. Zero-knowledge proofs (ZKP) can provide instant transaction verification, faster finality, and enhanced security. ZK-Rollups consolidate multiple transactions into a single proof, significantly reducing the on-chain data footprint. This method improves throughput and reduces costs, making it a crucial strategy for blockchain scalability.

As Ethereum struggles with high fees and slow transactions, how are its competitors stepping in to offer faster, cheaper alternatives?

Avalanche addresses scalability through a new consensus mechanism called Avalanche Consensus, enabling the processing of thousands of transactions and providing users with speed and cost-effectiveness. Solana uses a unique combination of proof of history and proof of stake to achieve unparalleled scalability and throughput. With a focus on parallel processing, Solana can handle transaction speeds of up to 65,000 transactions per second, significantly exceeding the capabilities of Ethereum.

What lessons can Ethereum learn from their approaches?

For Ethereum, several key lessons emerge. First, the importance of scalability cannot be overstated in a rapidly changing digital landscape. High transaction costs and low network speed risk alienating users and stifling innovation, making scalability a top priority for blockchain platforms. Second, Ethereum can learn innovative approaches from Avalanche and Solana to consensus mechanisms and network architecture. By adopting new solutions that prioritize speed and efficiency, Ethereum can improve its competitiveness and attract a broader user base.

The rise of meme coins on platforms like Solana has attracted both developers and users with their lower costs and faster transactions. What strategies should Ethereum consider to maintain its competitive advantage and market appeal?

As meme coins gain traction on Solana, Ethereum currently faces the challenge of retaining developers and users. With Solana offering lower fees and higher throughput, Ethereum needs to leverage its strengths and implement effective strategies to maintain its market position. To counter the appeal of Solana, Ethereum can prioritize the development and adoption of layer 2 solutions. Solutions such as sharding and rollup improve scalability and reduce transaction costs while maintaining security and the decentralization of Ethereum.

Can Layer 2 solutions or the Ethereum 2.0 upgrade sufficiently counter the appeal of Solana’s lower fees and higher throughput?

Ethereum’s transition to Ethereum 2.0, marked by the move to a Proof of Stake consensus mechanism, promises significant advancements in network scalability and efficiency. With the introduction of Beacon Chain, Ethereum is already paving the way for reduced energy consumption, increased transaction throughput, and enhanced security. Layer 2 solutions such as rollups and state channels will further reduce network congestion. Ethereum 2.0 has the potential to significantly increase transactions per second (TPS), leveraging innovations such as danksharding. In danksharding, the network simplifies transaction processing by relying on a single block proponent per shard, presenting a streamlined approach to scalability. While Ethereum and Solana both aim for scalability, Solana’s architecture inherently prioritizes high throughput, while Ethereum currently uses additional frameworks to achieve similar goals.

With recent migrations such as Ethereum Name Service moving to Layer 2 solutions to combat high fees and congestion, do you see this as a sign of deeper scalability challenges within Ethereum?

The recent ENS decision highlights Ethereum’s need for scalable solutions to remain competitive. I believe ENS’ migration to Layer 2 solutions marks a positive step toward addressing scalability issues, potentially boosting developer and user confidence in the future of Ethereum. The migration will bring significant benefits, including reduced gas fees, making transactions more accessible and driving ENS adoption. Transactions on Layer 2 will be cheaper and faster, which will be particularly beneficial for users transacting frequently or using low-latency dApps. Additionally, the migration makes it easier to integrate ENS into other projects, handling larger transaction volumes without compromising performance.

Do you think this will influence developer and user confidence in Ethereum?

Users may experience a transition period to adapt to the new Layer 2 environment, which could impact user experience and satisfaction. This adjustment could encourage some users to explore alternative blockchain platforms such as Solana, which already offer faster and more scalable solutions.

Projects like Audius and Serum are migrating to Solana due to its greater scalability and lower transaction costs, what steps should Ethereum take to prevent further migration of projects?

Ethereum should focus on improving interoperability with other blockchains and DeFi protocols to expand the ecosystem and drive innovation through collaboration. Additionally, maintaining an engaged community and transparent governance processes is essential for sustainable growth. Extending the security model to additional networks like bridges or Oracle networks via a “security as a service” approach will be beneficial. Recent innovations such as EigenLayer, introducing resttaking, will also strengthen Ethereum’s utility and solidify its role as a foundational security layer for the broader crypto ecosystem.

So how can Ethereum maintain its dominance?

To capture smart contract applications requiring high security and censorship resistance, Ethereum should improve its competitiveness in terms of throughput and cost. This strategy could position Ethereum to attract applications such as stablecoins and tokenized financial assets, even as lower-cost chains dominate retail-friendly use cases such as NFTs.

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Ethereum

Cryptocurrency liquidations surpass $200 million as Ethereum and Bitcoin plummet

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Bitcoin and Ethereum Tank as Crypto Liquidations Reach $150 Million

Cryptocurrency market liquidations hit their highest level in a week on Wednesday as the price of Bitcoin fell below $60,000.

Over the past 24 hours, over 74,000 traders have been liquidated for $208 million, CoinGlass the data shows it.

The majority of those losses, about $184 million, went to investors holding long positions who had bet on a price rise.

The largest liquidations hit Ethereum investors, at $55.5 million, almost entirely on long positions, the data showed.

Current issues surrounding US monetary policy, geopolitical tensions, and the upcoming US presidential election in November are expected to impact the price of the leading cryptocurrency throughout 2024.

Bitcoin abandoned The stock price fell from $62,200 to $59,425 intraday. The asset has since recovered its losses above $60,200, but is still down 3% over the past 24 hours.

In the meantime, Ethereum East down 3% During the same period, the stock price fell from a high of $3,425 on Wednesday to a low of $3,254. It is now trading at $3,300.

Solana, the world’s fifth-largest cryptocurrency by market capitalization, was the worst hit among the top 10 cryptocurrencies, down about 8% to $140. Solana had been riding high on New York investment management firm VanEck’s filing of its Solana Trust exchange-traded fund late last month.

Major cryptocurrencies have been falling over the past month. Ethereum has fallen more than 12% over 30 days despite growing interest in the launch of Ethereum spot ETFs.

Some analysts predict that new financial products could begin marketing in mid-Julywith at least one company predicting that the price of ETH will then take offBitcoin is down 12% over the same period.

Certainly, analysts always see further price increases this yearThe current market cooling represents a precursor to another major price surge in the coming months, Decrypt reported Monday.

On Wednesday, analytics firm CryptoQuant released a report examining Bitcoin Mining Metrics and highlighted the conditions for a return of prices to current levels.

Edited by Sebastian Sinclair.

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Ethereum

Volume up 90%: good for ETH price?

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum (ETH) has emerged as a beacon in the sea of blockchains, with a staggering 92% increase in decentralized application (dApp) volume over the past week. But the news comes with a layer of complexity, revealing a landscape of both opportunity and potential setbacks for the leading blockchain.

Cheap gas fuels the fire

Analysts attribute the explosion in decentralized application volume to the Dencun upgrade in March, which significantly reduced gas costs – the cost associated with processing transactions on the Ethereum network.

Lower transaction fees have always attracted users, and this recent development seems to be no exception. The surge in activity suggests a revitalized Ethereum that is likely to attract new projects and foster a more vibrant dApp ecosystem.

NFT craze drives numbers up

While overall dApp volume (see chart below) paints a positive picture, a closer look reveals a more nuanced story. This surge appears to be driven primarily by an increase in NFT (non-fungible token) trading and staking activity.

Source: DappRadar

Apps like Blur and Uniswap’s NFT aggregator have seen significant surges, highlighting the rise of the NFT market on Ethereum. This trend indicates a thriving niche in the Ethereum dApp landscape, but raises questions about the platform’s diversification beyond NFTs.

A look at user engagement

A curious problem emerges when looking at user engagement metrics. Despite the impressive increase in volume, the number of unique active wallets (UAWs) on the Ethereum network has actually decreased.

Ethereum is now trading at $3,316. Chart: TradingView

This disconnect suggests that current activity could be driven by a smaller, more active user base. While high volume is certainly a positive indicator, seeing broader user participation is essential to ensuring the sustainability of the dApp ecosystem.

A glimmer of hope ?

A positive long-term indicator for Ethereum is the trend of decreasing holdings on the exchange, as reported by Glass nodeThis suggests that ETH holders are moving their assets off exchanges, potentially reducing selling pressure and contributing to price stability.

If this trend continues, ETH could potentially target $4,000 this quarter or even surpass its all-time high. However, this price prediction remains speculative and depends on various market forces.

Ether price expected to rise in coming weeks. Source: CoinCodex

Ethereum at a Crossroads

Ethereum is at a crossroads. Dencun Upgrade has clearly revitalized dApp activity, particularly in the NFT space. However, uneven dApp performance and the decline of the UAW are raising concerns about the long-term sustainability of this growth. Network growth, measured by the number of new addresses joining the network, is also slowing, according to Santiment, which could potentially hamper wider adoption.

The short-term price outlook for ETH remains uncertain. While long-term indicators, such as declining exchange holdings, suggest potential for price appreciation, slowing network growth could lead to a price decline in the short term.

Look forward to

The coming months will be crucial for Ethereum. The platform must capitalize on the renewed interest in dApps by attracting a broader user base and fostering a more diverse dApp ecosystem beyond NFTs. Addressing scalability issues and ensuring user-friendly interfaces will also be essential to sustain growth.

If Ethereum can overcome these challenges, it has the potential to cement its position as the premier platform for decentralized applications. However, if it fails to adapt, other waiting blockchains could capitalize on its shortcomings.

Featured image from Pexels, chart from TradingView

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Ethereum

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

The first half of 2024 has seen a surge in major hacks in the cryptocurrency sector. Ethereum (ETH)Bitcoin (BTC) and XRP have resulted in losses of over $1.5 billion due to cryptocurrency scams. This year, over 200 major incidents have resulted in losses of approximately $1.56 billion.

Cryptocurrency Scam Losses Reach $1.5 Billion

According to data from Peck Shield Alert, only $319 million in lost crypto funds have been recovered. Furthermore, this year’s losses represent a staggering 293% increase over the same period in 2023, when losses totaled $480 million.

Overview of Cryptocurrency Scams in 2024, Source: PeckShieldAlert | X

Additionally, DeFi protocols have been the top targets for hackers, accounting for 59% of the total value stolen. More than 20 public chains have suffered major hacks during this period. Additionally, Ethereum, Bitcoin, and XRP top the list for the amount lost via cryptocurrency hacks.

Additionally, Ethereum and BNB Chain were the most frequently targeted, each accounting for 31.3% of the total hacks. Meanwhile, Arbitrum followed with 12.5% of the attacks. One of the most significant incidents occurred on June 3, 2024.

Bitcoin DMMa major Japanese cryptocurrency exchange, reported a major breach. Attackers stole 4,502.9 BTC, worth over $300 million at the time. The incident highlighted the vulnerabilities of exchanges, especially those that handle large volumes of digital assets.

Major XRP, ETH and BTC hacks

A week after the DMM Bitcoin attack on June 10, UwU Loana decentralized finance (DeFi) lending protocol, was compromised. The breach resulted in a loss of approximately $19.3 million in digital assets. The hack underscores the ongoing risks associated with DeFi platforms, which often operate with less regulatory oversight. The platform later offered a $5 million reward to catch the hacker.

Earlier this year, on February 3, 2024, Ripple co-founder Chris Larsen confirmed a major security breach involving his personal wallets. Initially, rumors circulated that Ripple itself was targeted. However, Larsen clarified that the hack involved his digital wallets and not Ripple’s corporate assets.

The hackers managed to transfer 213 million XRP tokens, worth approximately $112.5 million. Additionally, on-chain detective ZachXBT first alerted the community about the suspicious transactions. In response to the theft, Larsen and various cryptocurrency exchanges took swift action to mitigate the impact.

Several exchanges, including MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC, collaborated to freeze a significant portion of the stolen funds. Binance alone froze $4.2 million worth of XRP to aid in the investigation.

Additionally, on April 2, 2024, FixedFloat, a Bitcoin Lightning-based exchange, experienced a security breach. Unauthorized transactions resulted in financial losses exceeding $3 million. This incident highlighted ongoing security issues for FixedFloat, following a similar breach earlier in the year.

The company has also faced significant challenges securing its platform against repeated attacks. Additionally, in February, hackers stole $26 million worth of Ethereum and Bitcoin from FixedFloat. These digital assets were then transferred to exchanges for profit.

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Ethereum

Ethereum’s Year-Over-Year Revenue Tops Charts, Hitting $2.7 Billion

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum fees drop to seven-month low as L2 competition heats up

Ethereum blockchain has been in first place for a year incomesurpassing all major blockchains.

According to data provided by Lookonchain, Ethereum generated $2.72 billion in annual revenue, surpassing the Bitcoin network by a margin of $1.42 billion. The data shows that Bitcoin accumulated $1.3 billion in revenue over the same period.

Defi Llama Data watch that Ethereum is still the leader in decentralized finance (challenge) with a total value locked (TVL) of $58.4 billion, or 60.9% of the entire market. The blockchain recorded a 30-day fee revenue of $131 million, according to the data aggregator.

Bitcoin’s TVL is currently set at $1 billion.

The network of the second largest cryptocurrency, ETH, witness a 155% year-over-year increase in its fee revenue in the first quarter of this year, as the cryptocurrency market saw a bullish trend.

Tron comes in third with annual revenue of $459 million. Solana and BSC also recorded nine-figure revenues of $241 million and $176 million, respectively.

Notably, Tron is the second largest chain in the challenge scene with a TVL of $7.7 billion. BSC and Solana take third and fourth place with TVLs of $4.8 billion and $4.5 billion, according to Defi Llama.

Avalanche, zkSync Era, Optimism and Polygon reached the top 10 with $68 million, $59 million, $40 million and $23 million in year-over-year revenue, respectively.

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