ETH fees return to relatively normalcy after Ethereum price plunged 36% in days
Ethereum price fell more than 20% on September 5 – its worst day since the Black Thursday incident. ETH quickly touched $ 311, its lowest level since August 2, before seeing some blue the next day.
The top altcoins, including Ethereum price, have dropped significantly
The brutal plunge, however, significantly reduced gas fees to just 107 Gwei per a typical transaction. While the Ethereum blockchain remains quite costly, its fees have now declined over five times from an all-time high of nearly 485 Gwei reached on September 1.
Meanwhile, the top altcoins have dropped significantly since September 2 due to a double-whammy of DeFi exhaustion, and Bitcoin failed ascent to $ 12,000.
The latest Ethereum crash coincides with the alleged scam of being the anonymous founder of rival SushiSwap by Uniswap. Along with SUSHI, the other native tokens of prominent DeFi projects have come under pressure. Yearn.finance (YFI) hit 33%, dropping to $ 18,187 on September 5.
Waiting for the market crash to deal with exorbitant fees may not seem like the best solution, but the community is actively working out a more viable solution.
Ethereum founder Vitalik Buterin recently published Ethereum Improvement Proposal (EIP) 2929, which aims to reduce network congestion by increasing gas costs for specific contracts by a factor of three.
Meanwhile, stablecoin issuer Tether recently started taking advantage of Ethereum’s layer 2 scaling solution while announcing the implementation of ZK-Rollups.
The total value locked in DeFi has dropped by 22% with the recent crypto market sell-off that hit DeFi tokens hardest
The total value locked in DeFi platforms has taken a huge hit by falling 22% since its peak value of $9.512 Billion. The reduction of assets locked in DeFi platforms was captured by the team at Unfolded via the following Tweet which also noted that this was DeFi’s first major correction.
First major DeFI correction down -22% from the peak pic.twitter.com/F6GPOmLVhZ
— Unfolded (@cryptounfolded) September 6, 2020
To note is that the drop in the total value of digital assets locked in DeFi begun around the 2nd of September after a peak value of $9.512 billion. This coincides with the earlier observed crypto market sell-off that saw Bitcoin fall from $12.000 and retest $10,000 on four separate occasions.
There have been two plausible theories as to why Bitcoin fell as hard as it did. Firstly, it is suspected that Bitcoin miners from China dumped their bags of BTC on multiple crypto exchanges. Secondly, it is known that Bitcoin is highly correlated to the stock market that has also experienced considerable losses in the past week.
Furthermore, Ethereum was also hard hit by the fall of Bitcoin due to its correlation to BTC.
The reason $ETH so much weaker than $BTC right now is because how much was locked in all these defi trap vaults and few were sold on the way up. Now, all these farmers rush to unstake and sell because aint no APY worth a decline -35% in 3 days. Welcome to reality, nerds
— Edward Morra (@edwardmorra_btc) September 5, 2020
Yield farmers most likely decided it was time to exit to save their profits as explained in the following tweet.
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