The current stats for the second-largest digital currency highlight an exceptionally bullish trend lately. Various indicators concluded that throughput and transaction are at a record high for the crypto network.
Glassnode dug into the crypto network since the asset has skyrocketed and achieved a record high of $3,447 as of May 2021. The report revealed that by increasing the gas limit to 15 million, the rate of processing on the blockchain increased proportionally. Presently the rate of processing transactions is on a new high sitting around 16.5 transactions/second. Even with a steep increase in throughput, Ethereum still lags behind the competition. However, none of the competitors has the ability to kill Ethereum as of yet.
A question arises, if increasing the gas limit positively affects the throughput of the blockchain, then why stop at 15M? why not set the limit much higher? This is not possible because a certain limit of gas can be used for transactions represented in a block and tweaking it just the right amount helps manipulate the price of operating a single node and the progress of the blockchain itself. This helps miners to tweak the limit under heavy load, relieve the strain, and reduce the gas price. The said methodology works as the cost of gas has fallen from $30 to $8 as per the latest statistics.
Presently, exchanges hold twelve percent of the Ethereum supply, which in itself is the lowest that has ever been for more than a year now. On the contrary smart contracts have gained popularity, with almost 22.8% of Ethereum supply held up in smart contracts.
The report concurred that the equal and opposite styles of the curves indicate a good fit for the product market and the demand for Decentralized finance by Ethereum holders.
ETH network value to transaction ratio is falling
The report also delved into ETH network value to transaction ratio that differentiates the market cap of a network to transacted volume in the specified chain. What the metric intends to do is explain whether a network is under-valued or over-valued.
The current NVT ratio of Ethereum is low that indicates the asset is undervalued, which supports the recent spike in Ethereum price. Recently, Ethereum has stepped down a little from its all-time high price but is comfortably sitting at $3,315 with an 8% high.