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Ethereum fees are skyrocketing — But traders have alternatives

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With the rapid growth of decentralized finance, upcoming scaling developments on Ethereum 2.0, and increased crypto allocation in the portfolios of institutions, the price of Ether (ETH) is rapidly ascending. In fact, we’ve already seen ETH break the $2,000 barrier for the first time, marking a brand-new all-time high. All this action may be bullish for ETH holders and DeFi investors, but for smaller DApp developers and other users on the network — such as traders using ERC-20-based stablecoins — it’s quickly pricing them out.

That’s because the cost of using any stablecoin depends on the blockchain network on which it functions. And, once again, the Ethereum blockchain is finding itself plagued with network congestion and rising fees. On Feb. 23, the average transaction fee on Ethereum soared past $39 for the first time, making transacting with ERC-20 tokens like the Ethereum-based versions of Tether (USDT) and USD Coin (USDC) expensive and even prohibitive.

While Eth2 with its transition to proof-of-stake may hold the answers in the long term, traders are currently left frustrated. The good news is that there are alternatives to allow them to avoid price volatility by holding their value in stablecoins — without paying hefty network fees.

Related: DeFi users shouldn’t wait idly for Eth2 to hit its stride

USDT and USDC on the Algorand blockchain

As a public and open-source smart contract blockchain using a PoS consensus algorithm, Algorand provides the scalability and speed that Ethereum is currently lacking. By running USDT and USDC on Algorand, users can transact in their preferred U.S. dollar-backed stablecoin at a fraction of the cost and time.

The technology behind the Algorand blockchain allows for high throughput, meaning more transactions can be processed per second than on other comparable blockchains, such as Ethereum. In fact, Algorand can process more than 1,000 transactions per second, compared to Ethereum’s TPS of fewer than 15.

This means that transactions on Algorand are settled almost instantly — in less than five seconds. And, rather than having to endure a hefty $39 average, fees can be as low as $0.001 per transaction — regardless of the transaction size.

Using the Algorand Standard Asset protocol for creating new tokens, developers can launch new ASA tokens to be used in a decentralized application — or use it as a way of transferring existing assets to a faster alternative blockchain.

With a market cap now comfortably above $35 billion, Tether’s USDT is the most popular stablecoin in existence and the third-largest cryptocurrency by market cap. USDT is currently issued on a number of blockchains, including Bitcoin (Omni protocol), Ethereum (ERC-20 protocol), Tron (TRC-20 protocol) and Algorand (ASA protocol).

Currently, if a trader wants to transfer 100 USDT (ERC-20), it would cost them approximately $3.43 in Ethereum network gas fees. The same transaction using ASA would be 100 times cheaper, making it extremely appealing, especially to high-frequency, high-volume traders.

The continued development of the crypto space

Ethereum, with the largest developer community in the crypto space and by far the highest number of DApps running on it, understands this better than anyone. However, the arrival of Ethereum 2.0 could still be some time away. However, the arrival of Ethereum 2.0 could still be some time away, and we need alternatives to Ethereum and its rising gas fees and network congestion.

Algorand is a technically sound protocol that provides the scalability essential for further crypto adoption and the continued growth of the space. And it’s a major step in the right direction as cryptocurrency gets closer to mainstream adoption.

Healthy competition such as this incentivizes layer-one protocols like Ethereum to intensify the moats around their products and to solve issues related to their scalability, transaction costs and interoperability. And this can only be a good thing for all participants in the network.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jay Hao is a tech veteran and seasoned industry leader. Prior to OKEx, he focused on blockchain-driven applications for live video streaming and mobile gaming. Before tapping into the blockchain industry, he had already had 21 years of solid experience in the semiconductor industry. He is also a recognized leader with successful experience in product management. As the CEO of OKEx and a firm believer in blockchain technology, Jay foresees that the technology will eliminate transaction barriers, elevate efficiency and eventually make a substantial impact on the global economy.

Ethereum fees are skyrocketing — But traders have alternatives

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Meeting Over Regulations Set Between Key Biden Staff And Blockchain Association

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The Blockchain Association stands as a crypto advocacy group based in the US, and has started to take part in the age-old practice of lobbying. In particular, it’s meeting up with various key figures within the Biden administration in order to advocate for more favorable regulations within the crypto space.

Crypto Lobbyists Doing Their Thing

Kristin Smith stands as the executive director of the Association, and gave a statement to Fox Business about the matter. In this statement, Smith highlighted that the Blockchain Association has already met with certain key figures within the Biden Administration, or are otherwise scheduled to meet them in the future.

These high-ranking officials of the White House include names like Wally Adeyemo, the former BlackRock executive, and Deputy Secretary nominee, as well as Janet Yellen, the Treasury Secretary. Alongside this, various representatives of the Treasury Department have been in talks with the Blockchain Association as well.

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Trying To Fix Mainstream Crypto Image

The Association’s biggest aim with these talks, according to the public statement, is to have the Treasury Chief gain a greater understanding of the value of crypto. Smith cited a comment Yellen made in the past, declaring that the primary use case for crypto was illicit financing, and Smith states that it’s the Association’s top priority to change this view.

Yellen herself has seen quite a bit of dislike from the general crypto community. Granted, she didn’t really make that a difficult prospect after declaring that was an extremely inefficient means to conduct any type of transaction, declaring that it wasn’t used as a transaction mechanism all that much.

Using Tools Just For Governments

It should be noted that Yellen isn’t against Decentralized Ledger Technology (DLT), just the general decentralized cryptocurrencies. Yellen had repeatedly shown interest in the centralized use case for DLT. In this angle, Yellen declared it would be very beneficial for the Dollar, offering quicker and safer, not to mention cheaper, means of payment as opposed to fiat.

Adam Traidman stands as the CEO of the BRD crypto wallet. In his public statement, he highlighted how the crypto space at large is trying to work with the highest echelons in the Treasury command chain as possible. In a statement, he highlighted that many in the crypto space aren’t even bothered by compliance or regulations. However, he advocated for a less stringent regulation just for now to spur innovation and jumpstart mainstream adoption.

Meeting Over Regulations Set Between Key Biden Staff And Blockchain Association

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Texas-Based Multicoin Capital Sees Large Investment From Binance

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Multicoin Capital stands as a crypto fund based in Texas, and has recently received an investment of an undisclosed amount from none other than Binance. According to Binance itself, this new investment within Multicoin Capital stands as a very unique one indeed. The biggest result of this is that Binance has now established itself as a limited partner within Multicoin Capital.

Multicoin Capital’s Many Ventures

As for Multicoin Capital itself, it stands as a venture capital company based in Austin. The company invests in cryptocurrencies and allows its investors a regulated amount of exposure within the blockchain industry at large. The latest move from the fund, excluding its new partnership with Binance, is that it had recently started to hoard large amounts of the RUNE coin. RUNE stands as the native token of an up-and-coming decentralized cross-chain automatic market maker.

Multicoin Capital was started during the great ICO crazy of 2017, with its first big funding round having occurred two years later, having ended with a total value of $75 million.

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The Mandatory Kind Words

Changpeng “CZ” Zhao took this opportunity to give the mandatory kind words for his company’s new partner. The CEO of Binance explained that Multicoin Capital served as a key figure within some of the largest crypto success stories out there. CZ cited the strong work ethic they have when it comes to their investments, highlighting its uncanny eye in identifying (And profiting from) emerging projects that promise to develop disruptive new innovations within the crypto market.

Indeed, a total of 20 investments have been made by Multicoin Capital, all of which early-stage funding for various startups within the financial and blockchain sectors. One of the more notable investments within this list is none other than MathWallet. Through doing so, Multicoin Capital and Binance Lab both took part in, and led, the Series B funding round for MATH.

Tushar Jain Singing Binance’s Praises Now

Through the big investment into Multicoin Capital, Binance will join alongside the likes of Union Square Ventures, Ribbit Capital, and even individuals like David Sacks, the former PayPal CEO, in becoming a limited partner for Multicoin Capital.

Tushar Jain stands as the Managing Partner at Multicoin Capital, and gave a very positive public statement about Binance. According to Jain, Binance is one of the world’s infrastructure providers with the greatest strategic importance when it comes to the blockchain space. As justification, he cited “thousands of hours,” that the firm had spent in the investigation of Binance.

Texas-Based Multicoin Capital Sees Large Investment From Binance

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Blockchain Transaction Tested on GOMX-4 Constellation

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Blockchain Transaction Tested on GOMX-4 Constellation

According to the latest announcement, JP Morgan, an American multinational investment bank headquartered in New York City, has tested a transaction of Blockchain in space. This Blockchain transaction testing is carried out by a Danish space firm named GomSpace’s satellites.

It was reported by GomSpace that it is the world’s very first bank-led tokenized value transfer in space, executed through smart contracts on a blockchain, established between satellites orbiting the earth.

Talking about GomSpace, it is a space company that aims to be engaged for space systems and services in the global market by introducing new products depending on innovation within professional nanosatellites. 

Blockchain is a peer-to-peer, decentralized distributed ledger technology that records data in individual blocks linked to one another using cryptography. This technology is known to offer immutability, transparency, security, and privacy. 

This Discovery Opens the Opportunity to a Potential P2P Satellite Marketplace

The report announced that a Blockchain transaction was executed between two GOMX-4 satellites in the low Earth orbit (LEO), which validated the approach towards a decentralized network where communication with the earth is not required.

As private companies prepare to launch their own constellations, the report mentions that in the long term, this discovery opens the opportunity to a potential P2P satellite marketplace, allowing data transfers between satellites against payment. 

GomSpace CEO Niels Buus expressed his views regarding his team’s support for J.P. Morgan. According to Buus, he is glad to have supported them as they explored this novel use case of a space-based payment infrastructure by implementing blockchain technology.

Blockchain Era has Begun 

Gone are the days when Blockchain technology was confined to finance and cryptocurrency. Today, this technology’s potential and relevance in other areas of business are coming under the limelight. Last year in July 2020, it was announced that the first use of Blockchain in renewable energy happened in Australia.

Apart from this, recently, it was announced that Twitter has considered whether to add bitcoin to its balance sheet. 

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

Blockchain Transaction Tested on GOMX-4 Constellation

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Enterprise meets DeFi: Organizations work toward adopting blockchain tech

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Decentralized finance is quickly maturing. While the total value locked in DeFi is over $45 billion, financial institutions and large corporations are starting to implement DeFi concepts to automate business processes. This is known as “enterprise DeFi.”

For instance, invoices and other financial products can be tokenized to ensure that transactions are valid and should be processed for payment across multiple parties. Coke One North America is one of the first large corporations to demonstrate this.

CONA is leveraging the Baseline Protocol — a project that coordinates confidential workflows between enterprises using messaging, zero-knowledge cryptography and blockchain — to tokenize invoices. CONA aims to “baseline” its entire supply chain by giving internal bottlers and external suppliers access to a private, distributed integration network.

Through use cases like CONA, such solutions are quickly gaining traction. There are also a number of vendors entering this infrastructure market including Provide, an enterprise middleware provider, and Big Four firm Ernst & Young. Most recently, ConsenSys — one of the leading blockchain software companies — announced plans to use Baseline Protocol as a solution for its enterprise clients, further demonstrating the importance of enterprise DeFi adoption.

How ConsenSys plans to drive enterprise DeFi

Specifically, ConsenSys Codefi — ConsenSys’ fintech suite that connects financial use cases to blockchain counterparts — will soon offer a baseline-compliant solution for its enterprise clients.

Didier Le Floch, institutional products and engineering lead at ConsenSys Codefi, told Cointelegraph that while the Baseline Protocol was developed by EY, ConsenSys and Microsoft, Codefi has been taking steps to ensure that its products will eventually be fully compatible with it:

“We want to enable the use of digital assets and the financing of those assets for payment use cases. These use cases will generate maximum business value, combining automation of business processes and payments using things like stablecoins, for example.”

In order to achieve this, Floch explained that the Codefi tech stack will be combined with the Baseline Protocol to deliver an effortless user experience for cases such as financing supply chains. Floch remarked that this is a first step in the right direction, as Codefi strongly believes that the enterprise sector will soon converge with the DeFi market: “There will be ebbs and flows, and it will be a journey with various steps, but we’ve already seen the promise of this convergence in the DeFi market.”

To his point, MakerDAO — the protocol behind the stablecoin Dai — announced support in June 2020 to use non-crypto-native assets, such as invoices and music streaming royalties, as collateral for its Dai stablecoin. Maker also voted to support a protocol from blockchain startup Centrifuge to bring real-world assets on its platform. Known as “Centrifuge Chain,” this is built on Parity’s blockchain development framework, Substrate.

Asset originators can use the Centrifuge Chain to mint nonfungible tokens of real-world assets, converting them to ERC-721 tokens. These assets can then be added to Tinlake, which is Centrifuge’s Ethereum-based DeFi protocol for decentralized asset financing.

A Centrifuge spokesperson told Cointelegraph that the company is currently working with MakerDAO to bring New Silver, an online real-estate lender, on to the Maker platform as an asset originator. As such, NewSilver would be the first asset originator using Tinlake to get to the MakerDAO executive vote, ultimately allowing asset originators to generate Dai as a credit facility.

DeFi protocol Aave also introduced a diversified money market to support real-world assets back in October 2020. According to the Aave blog post, this money market would make it easy for the Aave community to onboard real-world assets into the protocol, allowing investors to lend against assets, such as invoices, real estate and inventory finance. “Right now, it’s at a small scale, but there are DeFi lending protocols already taking steps to incorporate real-world assets into their protocols,” said Floch.

Breaking down barriers hampering adoption

Many enterprise DeFi concepts are still in early development, as a number of barriers exist. For instance, there are concerns regarding publicly available sources to determine the price of collateralized assets. Furthermore, many DeFi protocols venturing into the enterprise space only allow solutions for borrowing in crypto, which may be unappealing to mainstream organizations. Moreover, paying transaction fees in cryptocurrency may also be problematic for enterprises that typically deal in fiat payments.

Floch explained that Codefi’s use of Baseline Protocol is intended to address these concerns. For example, he noted that there will be an “Infura ITX” integration that will enable corporations to pay gas fees in dollars rather than Ether (ETH) when using the Baseline Protocol. Since the platform leverages the Ethereum network as its mainnet of choice, or as a common frame of reference for complex workflows, this integration will ensure a better user experience overall.

In addition, Floch mentioned that ConsenSys’ open-source zero-knowledge proof library, known as “gnark,” will be leveraged to ensure enterprise data remains private, yet verifiable.

While notable, Codefi’s implementation of the Baseline Protocol isn’t the only solution intended to solve the challenges related to enterprise DeFi adoption.

For example, EY has been heavily involved in the blockchain space, specifically in terms of enterprise DeFi development. Paul Brody, global blockchain lead at EY, told Cointelegraph that the firm has been working on DeFi enabling solutions since 2016, with the goal of making the inputs and outputs of enterprise business processes tokenized and then transactable:

“This means purchase orders, invoices, receivables, inventory — everything in traditional business-to-business processes should be ready to integrate into a DeFi ecosystem.”

Of course, Brody is aware of the challenges regarding this vision, noting that the first element to be tackled is achieving an acceptable level of privacy for enterprise users. Once this is accomplished, Brody explained that necessary standards need to be established where bodies, such as the Enterprise Ethereum Association, can be key partners in the pursuit of these goals.

Brody further mentioned that as an industry auditor, EY will not be offering financial services involving DeFi. Rather, the firm is devoted to ensuring that enterprise clients will be able to plug their business operations into existing DeFi solutions. For example, Brody explained that EY’s Network Procurement solution is designed to manage purchase orders and fulfillment, which would allow enterprises to exchange tokens for purchase orders, contracts, invoices and inventory transfers. “As soon as we see standards we can leverage, we hope that our enterprise users will be able to take advantage of these markets,” said Brody.

Institutions show interest in DeFi?

In addition to a growing number of enterprise DeFi solutions in development, there is now interest in DeFi from large organizations and financial institutions. This was recently demonstrated by the leading digital currency asset manager, Grayscale. On Feb. 26, 2021, the firm announced consideration to offer investors access to DeFi assets, including Aave, Compound’s COMP, MakerDAO’s MKR, Reserve Rights (RSR), SushiSwap’s SUSHI, Synthetix Network Token (SNX), Uniswap’s UNI and Yearn.finance’s YFI.

Although this is separate from enterprises using DeFi protocols to find real-world assets, Floch noted that this demonstrates more institutional players are ready to invest in prominent DeFi protocols:

“For institutional customers of Grayscale to start investing in those tokens is definitely a sign that they’re getting more comfortable with Defi, while understanding the value of those protocols (asset management, collateralized lending and trading automated in smart contracts).”

Enterprise meets DeFi: Organizations work toward adopting blockchain tech

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Google Finance Adds Dedicated Data Tab on Bitcoin and Ether

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Google has finally hopped on the crypto bandwagon. With the crypto industry now worth a mouth-watering $1 trillion, it can no longer be disregarded.

Google Adds ‘Crypto’ Tab To Feed

With many institutions coming into the crypto space in the last year, and many more projected to make a move soon, Google is making the crypto transition, as many had expected.

Through its Google Finance domain, the American tech company will enable its Google Finance users to get up-to-date price movements for their favorite cryptocurrencies. The domain platform, which originally catered for stock and currency markets, will see ‘crypto’ debut in its “compare markets” finance segment.

The new addition will let users know the latest price changes for popular virtual assets like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Google had taken a stand-offish approach to the emerging blockchain technology previously. During the early years of cryptocurrencies gaining steam, the Alphabet subsidiary had banned crypto adverts on its platform. It went as far as bringing down videos on its Youtube platform that discussed cryptocurrencies.

But in a 2018 Blockchain Summit in Morocco, Sergey Brin, co-founder of Alphabet Inc., noted that the company had clearly missed it when it came to the nascent technology. Rumors are now making the rounds that the company is quietly acquiring crypto startups and investing in established crypto businesses. Ripple Labs’ is also mentioned as one of its crypto partners.

Crypto Now Gaining Global Attention

Bitcoin has played a vital role in cryptocurrencies reaching the enviable heights it is now on. With the premier digital asset owning a large share of the $1.6 trillion crypto market, global institutions and tech companies have found it hard to ignore it. 

MicroStrategy, a business intelligence firm based in Virginia, United States, has been beating the crypto drums for some time now. With its remarkable investments in BTC, it now holds a sizable share of BTC available in the ecosystem.

Electric car company Tesla Inc. also moved into the crypto space with an initial $1.5 billion investment in BTC. It is also looking to use the virtual asset as a payment solution, just like Mastercard and Visa plan to do.

The increased demand is making global financial regulators jittery as the sector is largely decentralized. TUS Securities and Exchange Commission (SEC) commissioner Hester Peirce have called for a dynamic regulatory framework. Peirce says this will better aid the development of the nascent technology and reduce its potential for misuse.

Google Finance Adds Dedicated Data Tab on Bitcoin and Ether

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