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The past few months have not been the best for the Ethereum cryptocurrency. And it looks like things are only going to get worse for ETH. The recent announcement that Uniswap is moving to its own network, Unichain, could significantly reduce activity on the Ethereum network. While some indicators are pointing to a “bearish” trend in 2024, Unichain's launch could be the final blow for the second-largest cryptocurrency on the market.
Ethereum’s future threatened by the launch of Unichain
of Launch of Unichain by Uniswap – a cryptographic solution that could upend all Layer 2 further weakening Ethereum’s economy. In fact, Uniswap, once the flagship DeFi platform on Ethereum, is now Clear pricing structure. Transactions on Unichain make Uniswap possible. You can earn a lot of money on gas and MEV tolls.
This means that these flows of funds that were previously reserved for Ethereum will now be captured by Unichain, further weakening the ETH network.
Expert Wajahat Mughal clarified about X as follows:Unichain is just another proof of Ethereum’s “bearish” status in 2024”.
if The most important DeFi applications from a revenue perspective Leaving the ship to manage its own capital flows raises the big question of what the future holds for Ethereum. How can I buy Ethereum?
- There is less Layer 1 activity.
- Fewer transactions in GWEI.
- Significant reduction in cash flow.
ETH crypto faces major development challenges
With the rise of Competitive networks such as UnichainEthereum is gradually losing its status as “ultrasound money”. This concept, introduced after the implementation of the EIP-1559 proposal, was theoretically thought to deflate ETH.
but, Since April 2024, Ethereum supply has been increasing againit even recorded the longest period of inflation since the transition to PoS consensus in September 2022.
Analysts are concerned that other protocols will follow Uniswap’s lead and move away from Ethereum’s Layer 1, resulting in a steep decline. Network goes into a negative spiral.
For the ETH crypto to survive, it will not only need to rethink its economic model, but also propose a new narrative that can attract investors and users in the face of these major changes.
However, a week ago, analyst Benjamin Cowen had already predicted a 50% correction in the Ethereum cryptocurrency. The launch of Unichain only confirms this trend.
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Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
