By
Temitope Olatunji
April 24th, 2024
The rise in the DeFi activity has got the Ethereum network transaction volumes to over 1 million and pushed it to its record high. The ETH 2.0 can majorly address the scalability issues for the Ethereum network.
The Ethereum network use and daily ETH transactions are on their way to attain new all-time highs. The transaction volume has been constantly surging over the last few weeks and is all set to hit new record levels. Last Friday, the Ethereum network executed 1.07 million ETH transactions.
This is pretty much close to the January 2018 Ethereum transaction volumes which had a historic high of 1,350,000 daily transactions. So far, this surge in transaction volumes hasn’t had a major impact on the ETH price. The ETH price has been moving sideways showing signs of consolidation around $250 levels.
With the current limitations of scalability with the existing Ethereum infrastructure, these signs are not much encouraging. with the daily transaction volumes surge, the transaction costs and gas prices are also on the rise.
DeFi Applications Driving High Ethereum Transaction Volumes
As per the recent reports, the decentralized finance (DeFi) activity on Ethereum is a major contributor to the rise in transaction volumes. The total capital tied to Defi applications has also reached a historic high of $2.7 billion.
In 2020, some projects like Compound, Balancer, Aave, and Synthetix have gained massive following and popularity. Interestingly, this rise in their popularity is synchronous with the rising Ethereum network transactions. Also, the recent introduction of yield farming has shot up the DeFi activity considerably.
To process and cater to this massive transaction volume demand, the Ethereum network has to come up with new scaling solutions. All eyes are currently on the launch of ETH 2.0! While the existing Ethereum network processes only 15 transactions per second, ETH 2.0 can process several thousand transactions.
The developers of ETH 2.0 say that they are on track with the progress of the platform. After months of development and testing, they are now on their way for the launch of the ETH 2.0 testnet. Danny Ryan, the ETH 2.0 project co-ordinator said:
“There is a little bit of stability work going on and other than that the blocker is some UX things (trying to make key management as close to mainnet as possible). I expect we announce a date Monday/Tuesday.”
The testnet will be basically the simulation of the real ETH 2.0 network and will work with some test coins. We expect the ETH 2.0 official launch by the end of this year.