The Ethereum network is handling as much activity as it ever has thanks to a steady uptrend of growing demand.
On May 29th, the tracker site Etherscan showed that Ethereum processed more than 49 billion units of gas in payments to node operators on the day, a new record for the second largest public blockchain behind Bitcoin.
Gas is the fundamental pricing unit used in the Ethereum ecosystem that helps users identify how much it costs to execute transactions and smart contracts. One unit of gas is comprised of 20 Gwei, which is a denomination of ether (ETH), the native asset and figurative fuel of the project’s network. One gwei is 10**9 of a wei, while one wei is 1/10**18 of one ether.
Yesterday, the Ethereum network broke its record for Total Daily Gas Used. pic.twitter.com/c4ybS3vcoQ
— ETHGasStation (@ETHGasStation) May 30, 2019
The rising network activity hasn’t led to acute congestion, as transaction fees and times have remained low this week. Per gas analyzer site ETH Gas Station, the recommended gas price for transactions was one gwei at press time — roughly $0.005 USD — and the median wait time for a transaction confirmation was one block, or approximately 12 seconds.
Such performances have been markedly better than when activity spiked on Ethereum in the past, namely when the popularity of CryptoKitties first exploded in 2017 and transactions on the blockchain’s network were acutely slowed, which led to users paying atypically high fees in order to get faster confirmations.
As for what has led to the current spate of activity, bullish optimism returning to the cryptoeconomy has undoubtedly been a large driver. As the prices of bitcoin, ether, and other top coins have been trending upward in recent months, buy pressure has been growing around these projects.
So with more ether being purchased, more ether is being used — and in some cases, such ether is being locked up in decentralized finance apps like MakerDAO CDPs to take out stablecoin loans only to buy more ether. Recently, the amount of outstanding loan volume on Ethereum’s top DeFi platforms hit a $100 million USD valuation for the first time ever, an indication of rising demand.
I think people are underestimating how reflexive $ETH can be given current market conditions. The primary driver of demand for gas today is leverage. Lock up $ETH as collateral, get stablecoin, buy more $ETH. The primary driver of demand for gas in 2017 was ICOs, aka leverage.
— Max Bronstein (@max_bronstein) May 30, 2019
Beyond just leveraging and speculation, though, blockchain gaming underpinned by Ethereum is also on the up-and-up. For example, the backers of CryptoKitties, Dapper Labs, have recently unveiled a new battle royale in Cheeze Wizards, which already has seen 1,000 ether submitted as payments for the game’s duelable wizard tokens.
What remains to be seen is whether more network congestion spikes will accordingly be had before Ethereum’s “ETH 2.0” Serenity upgrade materializes.
Another Milestone? Decentralized Oracles on Ethereum, Thanks to ChainLink Mainnet
The activation of ChainLink’s mainnet on May 30th didn’t break any records, but it did mark a milestone for the wider Ethereum ecosystem.
That’s because the mainnet’s launch has brought decentralized oracle capabilities to Ethereum, a reality that may prove to make the blockchain’s smart contracts “smarter” than ever, as these oracles will be able to feed real-world data to Ethereum’s otherwise intentionally inward-looking smart contracts.
In an associated announcement, ChainLink community leader and SmartContract.com chief executive officer Sergey Nazarov explained how the project leveraged decentralization to vet the external data that its oracles receive and send out:
“Chainlink’s approach to solving the problem of a ‘single trusted third party’ uses the same method that secures smart contracts themselves: decentralized computation. The Chainlink network allows multiple independent nodes to perform decentralized computations about the accuracy of an external input before it is written into a smart contract.”
In that post, Nazarov said some of the first oracle networks on Ethereum will be centered around retrieving “reliable market prices,” e.g. an ETH-USD conversion rate.
So just while Ethereum is getting more use than ever, the capabilities in and around the blockchain are also steadily reaching new heights.