Ethereum’s value has risen dramatically in recent months, prompting more investors to rush to purchase the cryptocurrency. The increasing popularity of decentralised finance (DeFi) and non-fungible tokens has been credited to the emergence of the second-largest cryptocurrency (NFTs). The current price increase in Ethereum is also due to recent modifications to the Ethereum network.
BitBoy Crypto, a popular analyst, offers insight on the Ethereum network’s planned upgrades and the ramifications these upgrades will have on the network and its native asset.
The biggest difficulty that ETH has faced is congestion, which has resulted in high fees and delayed transactions at times. Ethereum is set to undergo a transition as a result of all of these fundamental difficulties. The introduction of layer 2 solutions for ethereum will be a watershed moment in the transformation process. Few are nearing the end of their testing and are ready to go live at any moment.
Uniswap will be available on both arbitrum and optimism, providing users with a variety of perks. However, because the developers are currently working on the testnet, uniswap users do not have access to either of these layer 2 options. Because uniswap receives the most attention, many people are unaware that there are other layer 2 options available, such as Loopring.
Loopring is a Layer-2 scaling protocol built on the Ethereum blockchain for decentralised exchanges (DEXs) that can handle thousands of trades per second. In the layer 2 race, it is one of the early movers.
Polygon also expresses its thoughts on how the ethereum layer 2 experience will be. On polygon, you can already swap tokens and interact with some of Ethereum’s most popular defi platforms, all while receiving superior service. Although Polygon is considered a sidechain, the developer has said publicly that optimistic rollups would be used in the future.
Ethereum Improvement Proposal
As part of the London hard split, Ethereum will implement EIP-1559 next month, which would charge gas costs for each transaction. It is scheduled to launch in July 2021. The pricing structure of Ethereum will be altered, with gas fees being cut in half. Users will be able to see both of these fees.
Also, a fee-burning mechanism will be added to the tokenomics, whereby a percentage of the gas fees will be burned during each transaction, removing a small amount of ETH from circulation. This approach will result in a reduction in supply issuance, converting each into a deflationary asset.
Ethereum is now undergoing three adjustments that will result in a decrease in the amount of ether on the market. Staking, burning, and the rise of total wealth locked in Defi are the three.
Ethereum price gained a pace above USD 2,200, but it failed to hold gains. ETH started a fresh decline and it traded below USD 2,150. If the bears remain in action, the price could test USD 2,050. The next major support on the downside is near the USD 2,000 level. On the upside, the price is facing resistance near the USD 2,200 level. The main breakout resistance is now forming near the USD 2,250 level.