Happy New Year!
In the midst of a crypto bull run, it’s vital to look at the effect upon decentralized applications.
With crypto prices continuing to rise strongly, it looks like the blockchain community’s hopes for 2021 are already coming to pass.
But spare a thought for dapp developers and users. No. Really.
As with any large scale crypto price volatility, activity on the Ethereum blockchain has spiked, in turn driving up the cost of transactions.
Of course, that doesn’t impact the whales moving around millions of dollars of token value in and out of complex DeFi positions.
But for the rest of us, trying to mint NFTs, play games, or just swap $100 of tokens, we’re being priced out of the market.
The price of success
To be honest, this is nothing new. Gas prices have been historically high on Ethereum since May 2020 and very high since August.
The new price range for ETH and the general success of DeFi dapps means we’re unlikely to see sub-dollar gas fees ever again.
And, very few people would prefer to see 2019’s gas fees if that meant also 2019’s ETH price.
But, as an increasing number of new blockchains are tempting, why not have the best of both worlds; trade ERC20 tokens on your trusted DeFi dapps using a blockchain with sub-second transaction times and nominal fees?
In that context, the current bull run will accelerate the experimentation being carried out by the likes of Compound, Aave and Synthetix to use these new solutions – whether entirely new blockchains or Layer 2 Ethereum-based solutions – to futureproof their market-leading positions.
And new upstarts such as Neutrino (Waves), PancakeSwap (Binance Smart Chain) and Serum (Solana) will look to gatecrash the party.
Whichever way you look at it, 2021 is already shaping up to be an even more impressive year for dapps than 2020.
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