Whales push Ethereum towards $3K, but will the ‘complexity’ be too much
Ethereum has risen gradually over the week, with the crypto’s movements stirring hopes that better days may be ahead. Even so, not everything is going smoothly, with one Ethereum developer pointing out something interesting about the ecosystem’s growing complexity.
$3000 beckons for ETH
On the price charts, the world’s largest altcoin seems to be on the brink of crossing $3K. Trading at $2,946 at press time, ETH may soon breach the aforementioned resistance level, a level that has held up well despite a few unsustainable breaches.
According to analysts, sustaining a breach of the same will be key to ETH hiking to its former ATH again.
Ethereum Price Action | Source: TradingView – AMBCrypto
Co-incidentally this week, whales too were active again as their transactions began rising across the board. Hitting a high of $8.8 billion in a single day, this was the most significant spike in their activity since 24 February. In fact, this was around the time Russia began its invasion of Ukraine.
Ethereum whale transaction | Source: Intotheblock – AMBCrypto
On the contrary, retail investors who hold 58.21% of Ethereum’s 120 million ETH supply have been dormant as always. Since the market crash, their contribution to daily volume has just been 10%.
Despite the 17.1% hike in price this week, the non-whale cohort continues to remain fairly quiet.
Ethereum total transaction volume | Source: Intotheblock – AMBCrypto
A complicated matter
Worth pointing out though that investors’ bullishness only comes from Ethereum’s use cases and the potential it states it has with Proof of Stake (POS). This bullishness is actually beginning to affect the developers too. One of them actually believes that Ethereum’s complexity is close to breaking point and touching it would push it past the point of no return.
One of Ethereum’s team leads and developer Péter Szilágyi recently touched upon one of the most overlooked aspects of the system – Complexity.
According to him, with every Ethereum Improvement Protocol (EIP) such as EIP-1559, sharding, and even the upcoming merge, complexity keeps rising.
This rise in complexity could lead to cascading failure. And with the Merge coming soon, he said that this complexity will only keep increasing. He explicitly stated that if the protocol does not get slimmer, Ethereum is not going to make it past the Merge.
He added,
“There have been engineering attempts to reduce the complexity (module split in Erigon, responsibility split in The Merge). Yet there was never an attempt to reduce the protocol complexity. We are already past the point of anyone having a full picture of the system. This is bad.”
Szilágyi also stated that the cause of this issue is the “disconnect” between developers and the research team. The latter, according to Péter, has to only dream up an idea whereas the former have to include the new idea into the myriad of ideas introduced before.
This is not something that can be fixed in a snap, however.
“I can’t say what the solution is, but my 2c is to stop adding features and start culling, even at the expense of breaking things. There are less and less people knowing and willing to piece together a broken network. And each change pushes more away. (sic)”
If this does happen to break Ethereum, the crypto-space will likely face unprecedented damages.
