At least 68 new Ethereum ‘whales’ are said to have joined the network during a 30 percent price drop at the beginning of this month, according to data from crypto analytics firm, Santiment.
Indeed, “Santiment’s holder distribution chart shows that as #Ethereum was falling, there was a spike in the number of addresses with millions of dollars in #ETH, colloquially known as whales,” Martinez wrote, cited by CoinTelegraph. “Roughly 68 new whales holding 1K to 10K $ETH have joined the network in the past 3 days.”
— Ali Martinez (@satoshilatino) September 6, 2020
And indeed, the price of Ethereum has dropped significantly over the course of the last week. After peaking at $486 last Wednesday, ETH dropped as low as $320 before recovering to roughly $346, where it sat at press time.
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Why Is the Price of ETH Dropping?
The reason behind the drop has been cited as the increased level of network congestion that caused gas prices to rise and slowed transaction times.
Last week, Finance Magnates reported that increased levels of congestion on the Ethereum network have called the network’s future viability as the backbone of the DeFi ecosystem into question.
Indeed, Dave Parkinson, the Chief Operating Officer of Lamourie Public Relations, told Finance Magnates that “the number of DeFi projects attempting to run simultaneously on the Ethereum network has inevitably exposed the problems with scalability, the way CryptoKitties did a few years ago.”
However, at the same time Ethereum founder, Vitalik Buterin has said that the solutions to Ethereum’s scalability problems do exist. It’s just that people are not using them. “To those [saying that] ‘gas fees are too high’, my answer to that is ‘well then more people should be accepting payments directly through zksync/loopring/OMG’,” Vitalik wrote on Twitter.
“Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to… use it.”
However, Vitalik has also previously said that up to a certain point, Ethereum users and developers will simply have to adjust to the fact that gas prices may be higher from now on.
“I do think that contract devs will have to change to adjust to the new reality; the things that you optimize for will be different than they were in the last few years,” he wrote on reddit.
“Particularly, minimizing the amount of state that any single transaction needs to read or access is going to become extremely important, but minimizing eg. the amount of computation or the amount of transaction data used (especially the data) will continue to become less and less important.”