The past few months have witnessed a significant shift in Ethereum’s gas consumption landscape, with non-fungible token (NFT) marketplaces losing their dominance and decentralized exchange (DEX) Uniswap emerging as the primary gas consumer.
According to Nansen, a crypto analytics platform, there has been a notable decline in NFT-related gas consumption, with NFT marketplaces accounting for just over 3% of total gas usage, as compared to the 28% share they had in May this year. On the other hand, Uniswap has been the biggest gas guzzler, accounting for 31.99% of gas usage.
This transformation in Ethereum’s gas consumption patterns has been attributed to multiple factors, including network congestion caused by an influx of meme coin trading, particularly the recently hyped frog-themed meme coin PEPE. The surge in meme coin transactions resulted in heightened gas prices, prompting users to explore alternatives and alleviating the burden on NFT marketplaces.
The persistent gas crisis in Ethereum has prompted some investors to seek solace in blockchain platforms offering cost-efficient alternatives. Cardano, for instance, has been in the limelight recently, thanks to its ability to handle transactions more economically, following its recent Hydra upgrade. The implementation of Hydra’s layer-2 scaling solution has positioned Cardano as a viable option for users seeking relief from Ethereum’s high gas prices.
Although the decline in NFT-related gas consumption marks a significant turning point in Ethereum’s gas crisis, the broader Ethereum community anticipates the implementation of updates on the mainnet to address the persistent gas issues and improve scalability on the network. Ethereum’s transition to proof-of-stake in an event known as “The Merge” is one such update that is expected to address high gas prices. The Merge aims to migrate the network from a proof-of-work consensus model to a proof-of-stake consensus model.
Meanwhile, Ethereum’s native digital currency, Ether (ETH), has bounced back from a recent slump, experiencing an upward trend in the past week, up by 2.4%. ETH has surged from a low of $1,771 seen last Friday to trading as high as above $1,800 later this week. Ethereum market capitalization has also recorded huge gains in the past seven days, surging over 2% from a cap low of $215 billion to a high of $218 billion on Friday. However, ETH’s daily trading volume has plunged throughout the week, from a high of $10 billion last Friday to $5.5 billion in the last 24 hours.
In conclusion, the decline in NFT-related gas consumption is a significant development in Ethereum’s gas crisis, and the emergence of alternatives like Cardano is testament to investors’ eagerness to explore cost-efficient blockchain platforms. However, the updates on the mainnet, particularly The Merge, are crucial in addressing the persistent gas issues and improving the scalability of the network. The recent bullish trend in ETH’s price is encouraging and perhaps indicates a renewed investor interest in the asset, but the asset’s volatility remains a concern.