Ethereum continues to evolve, implementing new technological solutions and attracting institutional investor attention, significantly impacting the market.
Technological Updates of Ethereum
Recently, the network activated EIP-4844, known as proto-danksharding, which allows for a 65% reduction in data storage costs for Layer 2 protocols. This change has significantly lowered transaction costs, which is especially beneficial for decentralized financial applications and digital games.
Rollups that rely on Ethereum for security can now support transactions with fees below one cent.
Institutional Investments in Ethereum
Investment products tracking Ethereum have hit new trading volume highs. Weekly trading volume across Ethereum spot ETFs exceeds $2.5 billion, aided by funds from BlackRock and Fidelity. BlackRock's iShares Ethereum Fund reported over $900 million in net inflows over the past week, raising questions regarding potential shifts in institutional asset allocation strategies.
Cross-Chain Communication and Expanded Capabilities
LayerZero, a protocol enabling interchain messaging, now uses Ethereum as a finality anchor for 11 blockchain networks, including Avalanche and BNB Chain. Additionally, over 35 million ETH is currently locked in staking contracts, contributing to long-term holding behavior in the market.
Thus, Ethereum demonstrates strong growth by implementing new technologies and attracting significant investment volumes, emphasizing its importance in the blockchain and decentralized finance landscape.
