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As gas fees on the Ethereum smart contract platform soar, popular crypto influencer Lark Davis is calling on Ethereum co-founder Vitalik Buterin to finally roll out Ethereum 2.0.
In a new video, Davis tells his 218,000 subscribers that while he is bullish on Ethereum (ETH), the transaction fees on the smart contract platform have become “insane,” causing a mass migration of traders onto alternative decentralized finance (DeFi) platforms like Binance Smart Chain (BSC).
Davis calls upon Ethereum frontman Buterin to rectify the issue with the long-awaited launch of the team’s scaling solution, Ethereum 2.0.
“You do have to keep it real right now. The fees for Ethereum are crazy, crazy high which obviously doesn’t matter for the big money guys who are gobbling up Ethereum and waiting for it to go up to five digits. they’re looking at the investment thesis here. But we’re now at the point where ETH 1.0 – oh we need ETH 2.0 so soon, come on Vitalik [Buterin], get it going, man – ETH 1.0, most regular users are priced out of using the majority of applications on Ethereum.
And let’s keep it real, a transaction on Uniswap costs $50 on average these days. That’s crazy man, come on, come on that’s not cool at all. And if you want to get into a DeFi farm, you’re probably going to be paying a few hundred dollars to do that, which is loco, man. Totally loco.”
The analyst says that Ethereum is turning into a chain reserved only for the wealthy, and that the fees are likely triggering the explosion in popularity of Binance Smart Chain’s native BNB token and the PancakeSwap (CAKE) decentralized exchange that is built on BSC.
“Ethereum at this point is becoming a chain for rich investors. Good if you can afford it, right? Uniswap still does have deep liquidity and lists new tokens before anyone else and all that stuff, but right now we’re seeing non-rich users moving to other chains which is not surprising. Binance Smart Chain has been absolutely exploding in users with apps like PancakeSwap getting a lot of attention and actually starting to catch up to Uniswap in terms of total value locked. The Binance tokens exploded. Binance based DeFi projects all exploding over the last week as people are seeking greener pastures.”
As for Buterin’s progress on a remedy for the high fees, ETH 2.0’s beacon chain launched back in December, but still lacks the necessary scaling solutions needed to speed up and cheapen transaction costs. Buterin has previously said that although the team intends to roll out ETH 2.0 in three phases, Phase 0, Phase 1 and Phase 2, it would be possible to increase transaction speeds and lower costs with rollups during Phase 1.
Buterin says Phase 1 is expected to launch in August or September of this year.
“The roadmap has an interesting unintended artefact: sharded applications by themselves need phase 2. But sharded rollups only need phase 1, because rollups use the chain only for data, not for computation. So we will have all the tools we need for 6400x throughput quite soon!
So it’s not ‘rollups instead of sharding,’ it’s ‘rollups on top of sharding.’ That said, rollups are already here or coming soon even before sharding, and rollups without sharding still offer that 100x increase in throughput. So get on a rollup today!”
Although a solution may not be too far off, Davis believes that until ETH 2.0 can be deployed, traders will continue “voting with their feet” by using cost-efficient alternatives.
“The message is pretty clear from investors. People are voting with their feet here. People want to use DeFi but they’re not interested in paying $50 to do a swap for coins or a few hundred dollars to provide liquidity. They’re just not wanting to do that, and they are right to not want to pay those fees…
You have some rich Ethereum maximalists or whatever out there who are going to tell you, ‘You need to just deal with the reality of Ethereum right now, you shouldn’t be out there using these other chains,’ But you know what? Nobody cares about those opinions. People are voting with their feet.”
Featured Image: Shutterstock/Angela Harburn