Ethereum transactions rise as decentralised finance keeps growing
This week the price of Bitcoin (BTC) dropped steadily from a near $9,600 high to a low below the $9,000 mark before it started recovering. The cryptocurrency is now trading at $9,120, as it’s still range bound looking to stay above $9,000.
Ether (ETH), the second-largest cryptocurrency by market capitalization, started the week trading close to $240 but over time its price dropped to a $217 low. Since then ETH has been recovering and is trading at the time of writing at $224.
Despite the less-than-stellar price performance, Ethereum has been steadily growing this week thanks to advances in the decentralized finance space. Data from Ethereum blockchain explorer Etherscan shows that over one million transactions are being confirmed per day on the ETH blockchain, a number that hasn’t been seen since February 2018.
More transactions are being confirmed as users are taking advantage of a new trend in the decentralized finance (DeFi) space: yield farming. Decentralized lending protocols like Compound have launched their own governance tokens – in this case, the COMP token – which is being distributed to users who interact with the protocols, by either lending or borrowing money through them.
As one COMP token is trading well above $200, users are being incentivized to interact with the protocol, explaining the rise in ETH transactions. The incentive has been such that according to Compound’s CEO Robert Leshner, over $1 billion worth of cryptocurrency are now locked on the protocol.
These incentives have also meant that Ethereum users have been paying more to move funds on their network than Bitcoin users, for at least the last two weeks. Data shows ETH users have spent between $500,000 and $700,000 to move funds across their network, while BTC users are spending between $260,00 and $400,000 per day.
Those taking advantage of yield farming, according to Forbes, may be generating yields as high as 77% per year, simply by lending funds on Compound and taking out loans using these funds as collateral. Some now speculate these decentralized protocol governance tokens may be the start of a new bubble in the cryptocurrency space because of all the interest being created.
Hiding behind the hundreds of thousands of legitimate ETH transactions being made to farm yield, those behind PlusToken have moved their near 800,000 ETH stash for the first time since December 2019, threatening to dump the funds on the market.
PlusToken is an alleged Chinese cryptocurrency Ponzi scheme that reportedly amassed $3 billion before abandoning its investors. Reports have tied their previous transactions on the blockchain to added downward pressure for Bitcoin and other cryptocurrencies.
Bitcoin.org Could Be “in Danger of Being Compromised”
Bitcoin.org, the pro-bitcoin website originally registered by the cryptocurrency’s creator Satoshi Nakamoto, is “in danger of being compromised” according to its long-time maintainer Will Binns. Binns’ warning came after a dispute with one of the website’s co-owners, Cobra Bitcoin, where he claimed the alter “seized control” of the website and accompanying code repositories.
The website has been used to onboard new users into the cryptocurrency space by displaying information about Bitcoin, and offering resources users can use such as wallets, exchanges, and more. Binns claims he believes Cobra is looking to “illegally transfer ownership of the site without due process.”
Cobra, on the other hand, has revealed on GitHub that he removed the website’s maintainer after a conversation in which he “claimed that his work contributing to Bitcoin.org conferred on him more authority than what I had agreed with him.”
Earlier this year Cobra revealed he was reducing involvement in the website and was leaving it in “trusted hands.” The dispute could affect one of the main resources being used to onboard new users, as Bitcoin.org ranks on search engines when users search terms like “bitcoin.”
Cryptocurrency adoption has nevertheless continued to grow, with Venezuela’s government now testing bitcoin payments for passports and other state documents, after sanctions against the country temporarily suspended credit card payments.
Bitcoin payments can be accepted by the open-source payment processor BTCPay, which recently received a $150,000 grant from cryptocurrency exchange Kraken.