Why Ethereum’s Immediate Exponential Growth is Not Good
Written by Ruma Dass
We all have been going through a crypto wild ride in 2021. It started in early January 2020 with the Bitcoin price soaring. Ethereum soon followed along with other altcoins. We have come to a situation where every other coin with decent potential is at an all-time high. Some of this rise has been so high that it’s almost scary! So are we entering a bubble zone, or will we further grow, and up to what level?
I am not a trader. I invest in project fundamentals and Ethereum is the project having the maximum potential growth. All the major dAPPS are building on Ethereum. Some of the pioneering Ethereum dAPPs like Uniswap and Compound led the Defi movement. Also, Ethereum was the only coin in late 2020 which was showing the intention of breaking out. From its Covid lows of $130, Ethereum was able to pick itself up to $300. Then the Ethereum Beacon Chain launched and the option of staking came into effect. ETH price shot to $600.
In January 2020, this run of the bull market started. Soon Ethereum rose to $700 and then $1200. With such an increase in price, we saw a soaring rise in gas prices. The cost of a single transaction rose as high as $70. People who were yield farming were unable to withdraw their collaterals with such high gas costs. Projects like The Sandbox were airdropping NFTs. People were unable to withdraw them due to high gas fees. So basically, the retail small users were kicked out. We just do not want to pay such high gas fees.
Simultaneously, ETH Maxis like Evan Van Ness kept a blind eye and continued keeping the blindfold and did not have the guts to face the situation. Instead of constructive criticisms, their conversations were mostly around bashing other projects and price comparisons. (I am sure that the real developers are working in the background, but they do not get proper exposure). The solution given was to move to L2. Okay. But who will pay for the Gas fees for me to move to L2. I use 10 different dAPPs, so 10 different transactions. I need a minimum of $500 to move them to Loopring. Obviously, my money was stuck and I started using Binance Smart Chain. Today Binance Smart Chain had more transactions than Ethereum.
Now the value of Ethereum has risen to $1800. But am I, as a retail user using Ethereum? No. I am using another chain that is cheap, for now, decentralization does not matter to me (immediately, let the technology develop). In the long run, I am ready to move to a good project in Polkadot, Cardano, or any other chain which has potential.
Any price rise in Ethereum in the coming days will be specifically based on some celebrity shilling, an event-based, or just an investment on the potential of what Ethereum 2.0 will be. Ethereum 2.0 will only happen in the next 2 years. So any price increase will not be based on adoption. Adoption has stalled. Maybe the whales will come in and push the price. And that is the reason any exponential immediate rise in Ethereum price is not sustainable in the short term.
Look at the competitors. They are moving by leaps and bounds. Cardano will bring in Smart Contract capabilities with Guogen. Polkadot is going to launch Parachain auctions soon. Take a look at the Polkadot Projects launching. We are already aware of the great impact projects like Pokastarter and Paid Network has. Litentry did great in Binance Launchpool. SinglarityNet has just announced the movement of 1Bn AGI tokens to the Cardano ecosystem. Any Dapp Project without users is nothing. In the long term, I have high hopes for Ethereum. We should let ETH accumulate at this range of $1800 - $2000 for a longer time and then rise organically.
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