- MakerDAO founder Rune Christensen predicts that the demand for tokens and services from the DeFi sector will absorb all the market value into Ethereum.
- The costs for transactions on the Ethereum blockchain have quadrupled since the end of April.
MakerDAO’s founder, Rune Christensen, tweeted a prediction about the future of the Ethereum blockchain and made his prediction referring to the deposit of a high amount of Wrapped Bitcoin (wBTC) in the MakerDAO protocol to issue 4 million DAI, the stablecoin of the protocol.
Christensen expressed great optimism about the future of the DeFi sector and about the Ethereum blockchain. The founder of MakerDAO believes that the DeFi sector will eventually become a kind of vacuum that will move all the value of the crypto market to this platform. Christensen said:
4 million Dai was just minted with WBTC in a single transaction. This really showcases the latent demand for non-ETH assets, and it’s the beginning of a broader trend of DeFi acting as an economic vacuum that will eventually attract almost all value to the Ethereum blockchain.
Andrew Keys, managing partner of Digital Asset Risk Management Advisors, shared a similar view. In a publication for ConsenSys, Keys stated that the “infinite” use cases of Ethereum are a market opportunity worth about $80 trillion:
We will be able to trustlesstly and digitally represent fiat, gold, software licenses, equity, debt, derivatives, loyalty points, reputation ratings, and much much more that we can’t even conceive of yet.
Although Christensen’s post became viral, especially in the Ethereum community, it should be noted that the DeFi sector suffered severe blows in 2020. After a series of million-dollar thefts and protocol failures, the DeFi sector underwent a crisis of user trust. In the long run, this could be an obstacle to achieving Christian’s prediction.
Transaction costs on the Ethereum network quadruple
In addition, the Ethereum blockchain is facing a problem of congestion and high transaction fees. According to the analyst Ceteris Paribus, the gas prices and, therefore, tariffs to send a transaction in Ethereum’s network have increased by 4 times its value since the end of April to 41 Gwei.
In contrast, Ceteris Paribus stated that the cost of Gas in a period of high stress normally moves between 10 and 15 Gwei. This increase represents a danger for the operation of certain protocols that depend on a stable price of transaction fees.
Gas prices on Ethereum have been skyrocketing over the past month. Average gas price is now 41 Gwei, up 4x since end of April.
It uses oscillates between 10-15 outside of high periods of stress (i.e. Black Thursday). pic.twitter.com/RJmdquQNdC
— Ceteris Paribus (@ceterispar1bus) May 15, 2020