Your Weekly Update On All Things Crypto |
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Ethereuem: The London Hard Fork Has Finally Arrived |
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After much delay, the highly anticipated update that everyone in the crypto community has been waiting for is finally here, namely Ethereum’s (ETH) London hard fork. The significant upgrade had gone live at block 12,965,000 at approximately12:40 AM UTC.
The world’s second-biggest cryptocurrency by market capitalization has now finally deployed one of its most anticipated network enhancements, EIP-1559. The hard fork includes various upgrades known as EIPs (Ethereum Improvement Proposals), the most anticipated of which is undoubtedly EIP 1559.
What Does This Mean For Ethereum?
The update brings many EIPs to the blockchain as aforementioned, including EIP-3198, EIP-3529, EIP-3541, and EIP-3554. However, as previously stated, it is the EIP-1559 upgrade that has received the most community engagement and support.
EIP-1559 seeks to enhance Ethereum's gas fee market by instituting a base charge, which means wallet providers and consumers would be made aware of the cost of a transaction beforehand (in the past, it was compulsory to participate in a gas fee bid to miners, which meant that several users would often end up over or underpaying to have their transactions be added to the next block).
In other words, EIP 1559 reconfigures the fee system of Ethereum. Rather than its prior auction-based approach, wherein users paid the highest fees to have their respective transactions be included, the new and relatively much quicker Ethereum that has resulted from the post-London update features a dual structure. Under this new model, the authorization of any transaction will now require users to pay miners with a ‘basic charge’ plus ‘tips’. Base fees are disposed of (or 'burnt') on a regular basis.
Although the ‘tips’ rate may be changed by the dApp (decentralized application) user as well as the ETH holder, the ‘base fee’ rate is determined by the consensus. So, whenever the block reaches half of its capacity, the base fee rate rises.
Why Is This Update So Important?
Soaring gas prices have generated many difficulties and caused frequent congestion on Ethereum in the past, which was the case with the recent 'Stoner Cats' NFTs situation. Ethereum is the most extensively used public blockchain at the moment, and so if it desires to maintain its dominance and sustain its continued usage and popularity in the industry, then these problems would have to be solved and that is exactly what the crypto community hopes the London hard fork will accomplish.
A popular misunderstanding however is that the update would lower gas prices, which is not exactly the case. Instead, it is more accurate to state that it will minimize the volatility of gas fees. EIP-1559 will not significantly lower network costs, but it shall make fees more foreseeable for consumers, therefore improving the overall experience for users.
EIP-1559 was initially suggested in 2018 as a way to improve on Ethereum's auction-based fee mechanism, however, Vitalik Buterin originally outlined early thoughts for the upgrade on the Ethereum blog in 2016.
How Will Ethereum Deal With Inflation?
EIP-1559 also marks a significant alteration to Ethereum's monetary policy. As of now, every transaction with a base fee paid in ETH will be destroyed and withdrawn from circulation. Earlier, miners got the transaction fee, but EIP-1559 reduces the incentive for miners to influence the network by rearranging blocks, lowering the Maximal Extractable Value (MEV).
Furthermore, the miners shall only acquire a tip on top of the standard fee, which will assist them in determining which transactions to prioritize in a new block.
Deflationary Pressure
As of the time of this writing, EIP-1559 has already managed to burn ETH worth $1 million. The new upgrade burns the basic fee from all Ethereum transactions, which results in the reduction of the ETH supply. Meanwhile, the price of ETH has increased by more than 6% in the last few hours. Additionally, a handful of deflationary blocks have been successfully committed to the chain as of now, with the quantity of ETH burnt to be more than the block rewards, which is 2 ETH.
The burning of the fees will end up administering additional deflationary (or downward) pressure on ETH. Provided that there is a satisfactory amount of activity on the Ethereum network, ETH may become the very first deflationary cryptocurrency asset. According to Justin Drake (a cryptography researcher currently working at the Ethereum Foundation), the blockchain's different scaling solutions should boost the pace at which the fees burn, which he describes as "very optimistic and highly bullish". In recent weeks, the story around ETH's deflationary pressure has also granted the asset positive impetus. ETH is presently trading at approximately $2,800, which is an increase of over 20% in just the last week.
While some have predicted a ‘sell the news’ scenario that would cause ETH to fall in price, evidence shows that ETH might reach $3,200, however, only time will tell whether the so-called 'king of the altcoins' can reach that mark again, or if the price shall indeed dip once more. Nevertheless, the abovementioned hard fork represents a key step forward for ETH 2.0 and the eventual transition to a full Proof of Work (PoW) model, rather than its current Proof of Stake (PoS) mechanism. Lastly, investors are happy that an alternative token to ETH had not been created which had been one of the main causes of concern prior to the launch of the update.
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TransitNet Launches Title Verification Tools To Transform The Crypto Sphere |
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TransitNet is launching a new title registry for crypto wallets that may signal a complete paradigm shift in how institutional investors see crypto.
According to data presented by Finaria, $1.9 billion in crypto was stolen in 2020. A major reason for this level of theft comes from crypto's status as a bearer asset. This means that anybody who is able to get their hands on someone else's crypto essentially becomes the owner of it. This is also why crypto seems to be the currency of choice requested by ransomware attackers.
However, TransitNet is developing a new solution for investors, allowing them to turn their crypto from a bearer asset to a registered asset, making the whole crypto sphere more secure and attractive to institutional investors.
The first of TransitNet’s title verification tools is the Asset Collision Identifier (ACI). This tool lets service providers check for the collision of crypto wallets. In other words, it will identify wallet addresses that may be claimed by multiple managers and then help ensure that specific assets are not claimed by more than one fund. After the release of the ACI demonstrated the industry need for verification tools, TransitNet is now developing a title registry. The forthcoming release of which, will expand the ability for TransitNet users to register their cryptographic assets.
TransitNet has just closed a seed round on WeFunder worth $2 million. Investment from major players in the crypto investment industry was previously secured during an angel investment round. However, TransitNet’s latest investment round was to give access to the project to crypto investors across the world rather than the elite crypto investment funds. The names that invested back in 2018 include such renowned firms as BKCM, ALPHABIT, and Kenetic Capital, which is evidence of how significant a project like this could be. The ability for crypto to gain the same legitimacy as assets stored in the bank could be a genuine game-changer.
About TransitNet
Transit net provides the tools to assist service providers with title verification for cryptographic assets. Launched in 2020, the company seeks to provide institutional investors a more secure and transparent blockchain by creating a registry of cryptography assets.
TransitNet is the solution that the crypto industry needs to move to the next level. TransitNet offers crypto investors the ability to change their crypto from a bearer asset to a registered asset and will consist of a suite of different tools that will assist with title verification for cryptographic assets. TransitNet can be utilized by custodians, auditors, fund administrators, insurers, crypto exchanges, and most significant institutional investors.
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NFT Digital Art Market MakersPlace Raises $30M Series A |
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NFT's (non-fungible tokens) gain even more momentum as NFT marketplace MakersPlace raises $30M from big-name investors. NFT is a cryptographic asset that uses blockchain technology to certify ownership of digital items. MakerPlace enables the creation and circulation of those items. The likes of rap star Eminem, Sony Music, and others are part of the investment group backing this path carving the NFT trading platform. According to MakerPlace, Coinbase Ventures, Uncork Capital, Draper Dragon Digital Assets, 9Yards Capital are also among the investors. Some prominent names to be sure, investing in a blockchain technology platform that promises enormous growth, MakersPlace.
“We see this fundraise as continued validation for our mission,” stated Dannie Chu, chief executive of MakersPlace. “We will continue to push boundaries and empower digital creators with better tools and services while finding more ways to introduce digital art and NFTs to a mainstream collector audience.” 2021 has seen big growth for MakersPlace. Collectors using the market have grown by ten times, processing over 100 million transactions. The NFT market peaked at $250 million in the month of May but shows signs of passing that volume high soon.
Evolving the industry of digital ownership in Art and Music is just the start, but currently the most popular of NFT applications. Though the idea of digital ownership has existed for a long time in the video game industry and online applications, these new presentations introduce the element of scarcity through verifiable authenticity and uniqueness on a blockchain. Taking an existing popular concept and making it even more desirable and collectible. People, especially the young, are growing to find digital ownership a concept that is more familiar, comfortable, & adds value to their digital experiences. Massive growth in the NFT sector is pretty easy to forecast. Top marketplaces like MakersPlace will be the springboard for some innovative collectible expressions.
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Why EIP-1559 Is Massive For Ethereum 📈🔥
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Cathie Wood Weighs in on Infrastructure Bill Controversy - Supports Lummis Amendment |
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MOIP Interview with Michael Saylor, CEO of MicroStrategy
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Bitcoin Continues Bullish Breakout Setting Weekly High Over $45K |
Bitcoin continues to show strong momentum setting a high of over $45K last week. We have now set two consistent higher highs and higher lows on the daily chart, confirming our bullish trend reversal. Bitcoin is also now charting higher than both the 50-day and the 200-day moving averages, signalling a golden cross in the near future. However, we suspect strong resistance and choppy sideways price action at the 50K mark. This will give alt-coins the chance to increase their dominance and their valuations against Bitcoin.
With the price action we have been seeing over the past two weeks confirming the continuation of the bull market, it looks like we will be setting up for a very exciting Q4.
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Altcoin Dominance Fails To Break Out of Descending Triangle |
Altcoin dominance has struggled as of late given the explosive rise of Bitcoin. However top tier base-layer protocols such as Ethereum, Cardano and Polkadot have been stealing the lions share of the altcoin gains. We have said this many times before, but will repeat it again... It is hard for the altcoin market to keep pace when Bitcoin takes center stage. Therefore it is understandable that we have seen some consolidation in the alt-coin market given Bitcoin's rapid growth. With that said, Bitcoin does not go straight up forever, and when its price chops sideways, liquidity tends to shift into other coins in search for higher yield.
Mastering the liquidity waves of the crypto ecosystem is half art / half science, but when building a mental framework for this flow of liquidity is one of the most beneficial things you can do as a cryptocurrency trader.
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SingularityDAO is a decentralized platform, governed by the SDAO token, tasked with governing DynaSets. DynaSets are diversified baskets of cryptocurrency assets dynamically managed by AI and curated by the protocol. SingularityDAO brings the financial sophistication of AI-managed funds to DeFi, deploying SingularityNET’s AI technology to navigate complex markets.
SDAO has been on fire since its token generation event and continues to push higher. The beta app, offering staking, yield farming and more has just launched, and we suspect the price to go much higher.
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Polkadot will enable a completely decentralized web where users are in control. Polkadot is built to connect private and consortium chains, public and permissionless networks, oracles, and future technologies that are yet to be created. Polkadot facilitates an internet where independent blockchains can exchange information and transactions in a trustless way via the Polkadot relay chain.
the DOT token has been a sleeping giant but has shown very positive growth in recent weeks. It is still far off of its all time high vs. Bitcoin and we are confident we will retest those highs in short order.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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