Ethereum Throughput Skyrockets After Gas Limit Adjustment

Ethereum Throughput Skyrockets After Gas Limit Adjustment

On-chain metrics for the Ethereum network have been extremely bullish recently. Several indicators have revealed that transactions and throughput are at an all-time high.

In its weekly report, on-chain analytics provider Glassnode has delved into the Ethereum network as the asset surged to an all-time high of $3,447 on May 4.

The research has revealed that a miner’s adjustment increasing the block gas limit to 15M has increased the overall throughput of the Ethereum blockchain. It’s now reached a new all-time high this week of 16.5 transactions per second. This is still way behind rival chains, but none of them have managed to “kill Ethereum” yet.

There is a limit for the total gas that can be spent on the transactions contained within a block, and maintaining this limit helps manage the growth of the Ethereum blockchain and the cost of operating a node. When under heavy load, miners can raise the limit to ease the pressure and hopefully reduce the average gas costs.

It has had the desired effect as average gas prices have fallen from a high of $30 on April 20 to around $8 on May 2 according to BitInfoCharts.

Smart Contract holdings surge

The research noted a correlation between the amount of ETH being withdrawn from exchanges and the amount being locked into DeFi related smart contracts.

There is now around 12% of the total ETH supply held on exchanges, its lowest level for over a year. Conversely, almost double that (22.8%) has made its way into smart contracts, a figure close to its all-time high.

“The almost equal and opposite trend for these curves demonstrates a clear product market fit and demand for DeFi by ETH holders.”

Ethereum NVT ratio falling

Glassnode also looked into the Ethereum NVT ratio, which is a metric that compares the network market capitalization to the USD value settled on-chain.

Uptrends for this metric are more bearish, it explained. It indicates that transaction flows are getting smaller relative to the market cap, meaning the network may be over-valued. Downtrends are the opposite with increasing transaction flows relative to the market cap suggesting the network may be under-valued.

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The Ethereum NVT has been trending strongly downwards since January 2020, especially since the big sell-off in March 2020 which collapsed ETH prices to $110 temporarily.

“Recent high transaction throughput has also driven the NVT Ratio lower over the past few weeks suggesting support for the recent constructive price action.”

At the time of press, ETH prices had cooled from their recent ATH but were trading up 8% on the day at $3,315 according to CoinGecko.

Ethereum hits new record high above $3,400, extending its more than 300% rally this year

GUANGZHOU, China — Ether, the digital coin linked to the Ethereum blockchain, hit an all-time high of $3,456.57 as the cryptocurrency extends a rally that has seen its price gain over 350% this year.

The digital coin pared some of those gains in Tuesday morning trade in London and was trading at $3,369.74 at 11:20 a.m., according to CoinDesk data.

Interest in cryptocurrencies has surged over the past year with bitcoin continuously pushing new record highs. A number of factors including rising institutional interest and major companies such as Tesla buying the digital coin have been credited with its rise.

Bitcoin has been described as “digital gold” or a store of value in times of geopolitical tumult or financial market volatility as well as a hedge against inflation.

But Ethereum is different. It acts more as a platform that developers can build apps on. Ethereum is the name of the network or underlying blockchain technology, while ether is the digital currency used to power the platform.

‘Speculative excess’: ethereum finds new peak in sizzling crypto market

ETH hits new record of $3,457, ETH/BTC at nearly three-year high.

Cryptocurrency ether rose to afresh record peak on Tuesday before dropping sharply as some investors pulled profits from a white-hot market bulging with questionable new entrants.

A day after blowing past $3,000 for the first time, ether, the token traded over the ethereum blockchain, hit $3,457.64 on the bitstamp exchange before dropping 6% to $3,244.

That still leaves it with a gain of some 340% this year. Therise is in part a spillover from flows into bitcoin, which has grown in stature as big-name investors from Elon Musk’s carmaker Tesla to Wall Street investor Stanley Druckenmiller buy in.

New crypto coins proliferate

It is also being driven by a speculative frenzy in the assetclass. Joke cryptocurrency dogecoin is up by 9,000% this year to put the sum of its tokens on issue at over $54 billion. Other new tokens have proliferated, and buyers this week piled in to several tiny new coins promoted by porn stars.

“What we’re seeing right now is the definition of speculative excess,” said IG Markets analyst Kyle Rodda, who likened it to the tech-bubble mania of two decades ago.

“There’s money being thrown at anything in the cryptospace,” he added.

With a market capitalisation of $376 billion, traders are taking the gains in ether much more seriously and say it is catching up to bitcoin’s rise and that upgrades to the ethereum blockchain stand to make it more useful.

BTC dips 3% to $55,625

Against bitcoin the value of ether has more than doubled this year and it touched a more than two-and-a-half-year high early on Tuesday. Bitcoin, which is up 90% this year dipped to $55,625 while the U.S. dollar firmed slightly elsewhere.