It looks like Ethereum is seeing its reputation suffer due to the growing number of fees on its blockchain. As a result, several projects are looking to other systems through which they can establish themselves.
Ethereum Is Losing Customers Left and Right
Ethereum is the second largest cryptocurrency by market cap and the number one competitor to bitcoin. While it’s not as large a coin or as popular, its blockchain has garnered quite a bit of business over the years given its smart contracts capabilities. This makes it a popular blockchain amongst decentralized application (dapp) creators and those looking to build new coins.
But over the last few years, something rather strange has happened. The Ethereum blockchain has become too popular. So big, in fact, that it’s established itself a little too high on the financial development ladder. Too many projects have rushed to the Ethereum blockchain due to their desire to be quickly and efficiently developed, and as a result, the blockchain has been seriously bogged down.
Many users report slow traffic, heavy congestion and considerably higher gas fees, a real problem with many developers. Several have turned to competitors such as TRON (TRX) and EOS (EOS) as a means of seeing their projects come to fruition. While Ethereum remains relatively solid with traders, those looking to establish new coins and applications are finding it hard to keep their relationships steady.
In late September, fees on the Ethereum network reportedly jumped more than $11, the highest they’ve been in a long time (the highest recorded fee was $14, which occurred earlier in the month). This could potentially have to do with the rising transaction figures the blockchain has witnessed in recent days, garnering more than one million daily trades on September 17 alone.
These fees are resulting in many dead companies, the most recent being Uni Login. The firm seeks to make logging into Ethereum-based apps considerably easier, though last Friday, executives stated that the company would be closing its doors permanently, as it no longer made sense to stay on board and pay such high prices.
The Death of Several Enterprises
They mentioned in a statement:
Uni Login is out of gas. Not necessarily out of money, but the current Ethereum gas market, the rise of DeFi and new browser standards have changed the game significantly enough that we don’t see a way forward with the project… Some days, the whole process of onboarding a new user cost over $130, meaning you could buy a hardware wallet for the price of signing up on our app.
Several enterprises have now found neighboring blockchains to move to, such as Cardano (ADA) and OmiseGo. Many developers blame Crypto Kitties – the 2017 Ethereum-based app that proved to be so popular it crashed the ETH network – as the reason why Ethereum has never gotten its groove back.