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10 May 2021

Ethereum breaks away: Several factors power ETH all-time high push

Ethereum breaks away: Several factors power ETH all-time high push


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Overall, 2021 promises to be a crucial year for the Ethereum blockchain as developers continue to work toward the network’s integration with Eth2, which will see the blockchain part ways with its original proof-of-work consensus algorithm in favor of the touted energy and cost-efficient proof-of-stake consensus.

The Ethereum ecosystem celebrated another milestone toward the end of April, as major decentralized finance platforms Uniswap, Compound, Maker and other leaders are on the way to surpassing the $73-billion mark for the net value locked into their smart contracts on the Ethereum blockchain.

Simon Peters, a market analyst at eToro social trading platform, told Cointelegraph that the popularity and success of DeFi platforms and other Ethereum-powered applications and use cases are driving institutional investors to gain exposure to ETH.

Stoev told Cointelegraph that the rising popularity of DeFi platforms and decentralized applications is an important factor attracting investors to Ethereum:.

Ethereum’s evolution toward a proof-of-stake future also continued this month as the latest Berlin upgrade introduced a couple of important Ethereum Improvement Proposals to the blockchain protocol.

Ethereum analyst Viktor Bunin told Cointelegraph that EIP-2929 would eventually “guarantee a maximum size of the Merkle proof needed to verify a particular block” but would ultimately aim to accomplish two primary goals.

According to him, “it mitigates Ethereum’s largest remaining DoS vector, where an attacker could slow down the network by sending transactions that accessed storage in a way that was very cheap but took a long time for nodes to process.” Bunin further added that, ultimately, the “EIP gets us closer to stateless clients, which would enable devices like cell phones to trustlessly interact with Ethereum without needing to run a full node.”.

Bunin also added that the change of gas costs that came with EIP-2929 could adversely impact some smart contracts that relied on previous gas cost figures.

Asher summed up the importance of this EIP in lowering the gas cost associated with many functions that are required to utilize and build on Ethereum.

Nick Johnson, the lead developer of the Ethereum Name Service — a wallet naming tool — told Cointelegraph that an important function of EIP-2929 in the gradual transition to Eth2 will “make ‘stateless Ethereum’ more viable by reducing the maximum number of reads and writes that are possible in a transaction.

Notable EIPs are 1559 (Basefee) and 3238 (Ethereum Difficulty Bomb Delay),” which will then lead to the “merge and sharding, which is Ethereum’s transition from proof-of-work to proof-of-stake.” She added:

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