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Steady Uptake in Ethereum-Related Activities as 2.0 Upgrade Progresses

The Ethereum platform has seen an uptake in activities of late. First, the total volume of decentralized exchanges (DEXs), most of which are hosted on Ethereum, has seen a sharp growth in comparison to the amount recorded last year.

According to the monthly DEX volume by Dune Analytics, 2020 may just be halfway but the total DEXs volume in USD so far (as at end of May) has touched the ~$3 bln mark. The amount flips over the reported total DEXs USD volume for 2019 which was ~$2.4 bln -or slightly over $1 bln as at the end of May 2019.

Though the cost of running a DEX is supposedly much lower than for a centralized exchange and DEXs have the ability to attract trades for the plethora of ERC-20 tokens that have flooded the crypto market in recent time. But Dune Analytics did not proffer any factor(s) that could have been responsible for the growth.

The disclosure comes as there are indications that the initial deployment of Ethereum’s layer 2 scaling strategy has basically succeeded. Lead developer Vitalik Buterin in a tweet referenced new developments in the Ethereum’s L2 scaling space in the last month including StarkWare’s launch of its L2 ZK chain for transfers (0.003$/tx); Loopring’s L2 ZK-rollup for transfers going live in June; Tether integrating with the OMG network which recently launched its V1 mainnet beta of a fully trustless, low cost, high throughput way to transfer value; and Matic Network going live on May 31.

Others are Dharma announcing Tiramisu on May 29; Optimism concluding their ORU testnet integration with Synthetix; and Fuel Labs working on ORU-based transfers for Reddit tokens. These chains (both optimistic and ZK) which scale with the availability of layer 1 data all form a part of the most promising layer 2 scaling solutions in the past 12 months.

While its native asset, ETH, has seen almost an 18% rise in its price in the last seven days (at $236 as at this writing), Buterin notes that Ethereum is “explicitly less financial in nature” than Bitcoin which is primarily a financial tool and 2020 is not a financial but a virus crisis hence the need for cryptocurrencies’ narratives to adjust. He also added that finance is relatively less important this decade than it was in the last decade, and the crypto space needs to adjust to this reality.

There is also progress on where Ethereum 2.0 is going and what the scalable proof-of-stake infrastructure might become. Danny Ryan posted that they are currently in the testnet phase and Ethereum 2.0 is inching closer to launch every day as it “aims to be a more secure and scalable context for the current Ethereum mainnet, providing little disruption to the way things are done today. At the same time, it provides an upgraded context for us to grow into.”

This is regardless of the expected growth effect that the proposed replacement of the Proof of Work protocol in Ethereum 2.0 with Proof of Stake (PoS) will have on the platform’s ecosystem. Ethereum 2.0, which will allow staking through PoS for validators to confirm transactions on the blockchain instead of miners, has been hyped to be the game-changer that the blockchain space needs. The validators are to lock up (or stake) at least 32 ETH for this purpose and incentivized in the process. So far, a finding shows that there are currently 118,382 Ethereum wallets that have more than 32 ETH in them should they wish to participate as validators. Going by’s indication that the number is up +13.64% in just a year (as at June 1) -though no guarantee that all of them will stake, interest could still rise before the final launch and more activities could be seen on a more decentralized Ethereum network.

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