In a show of dominance, the total transaction fees generated by Uniswap — a leading Ethereum-based decentralized exchange (DEX), is approximately 50 percent of Bitcoin’s.
The Rise and Rise of Uniswap
In a tweet posted on Aug 19 to highlight and contrast between the developments of Ethereum and Bitcoin, the metric goes on to show there is far more activity in the smart contracting platform than the single-purposed network.
Uniswap is a popular DEX in Ethereum that democratizes and incentivizes market-making enabling people or firms to launch liquidity pools.
Unlike competing DEXes with similar models — like Bancor, Uniswap has no native token. Instead, related fees are paid in ETH. According to Defi Pulse, there is $175 million worth of ETH locked in Uniswap, roughly equal to 0.27 percent of the total supply.
Amid the explosion and increasing preference of Uniswap, there is news of fake tokens being auctioned through the portal as impersonators defraud investors of upcoming projects planning to list through an IDO.
Regardless, fanned by a slew of supportive events in the last few months and primarily the growth of open finance, or DeFi, the exchange has not only expanded but continues to improve, plugging identified fragilities.
Presently, two versions of Uniswap are in operation. However, it is Uniswap V2 that is dominant and is behind the spike in transaction fees flowing directly to Ethereum miners.
Bitcoin versus Ethereum and DeFi
At this pace, and considering the multi-purpose and diverse nature of Ethereum, the platform’s miners are the major beneficiaries.
On the last day, for instance, miners racked in $474,671 which is almost half of Bitcoin’s at $1,039,042. But behind Uniswap V2 were fees from leading DeFi dApps like Balancer and Curve.
Combined — and putting into consideration fees from gaming and other popular dApps launching from Ethereum, the network generated over $3.728 million in transaction fees.
This is almost 3x of those from Bitcoin, consequently calling into question how developers will work on addressing the rising fee problem.
Coping with high Transaction Fees
BTCManager reports that Ethereum is currently preparing for ETH2 of which the Beacon Chain will launch either late this year or in early Q1 2021.
While several proposals have been forwarded to reduce transaction fees in Ethereum’s Proof-of-Work system, it is highly likely that users will have to cope with high transaction fees until the activation of Serenity, or at least when Proof-of-Work consensus algorithm is replaced with Proof-of-Stake.
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