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Table Of Contents
Here are the developments around the Ethereum ecosystem from the first week of June:
ApeCoin community proposes to dedicate to Ethereum
The ApeCoin Community last Friday tabled a new proposal that would see the APE token remain tied within the Ethereum ecosystem. The voting stage for the proposal (AIP-41) is set to run until tomorrow, June 9. Votes have shifted from initial high support (those in favor of ApeCoin DAO remaining on Ethereum) to a less than 60% support. Currently, 45.10% of ApeCoin holders are against adopting the proposal to exclusively remain on Ethereum rather than migrating to other chains.
The new proposal by ApeCoin DAO brings out that “migrating to a different chain is a costly, risky, and complex endeavor with many moving parts that may, if not thoughtfully considered, result in catastrophic loss, or at worst, abandonment by Yuga Labs and other entities that would otherwise (be meaningful) to ApeCoin.”
The comments come after Yuga Labs caused a network breakdown on Ethereum with sky-high gas fees exceeding $175 million upon the Otherside NFTs launch that prompted the BAYC creator to suggest that ApeCoin might necessarily need to migrate to its own chain. However, the community seems bent on remaining on Ethereum for said reasons, in addition to the fact that the DAO does not relish separation from the lucrative Yuga Labs, whose NFTs primarily reside on Ethereum.
An Ethereum L2, instead
While the proposal only insists on voting to keep ApeCoin on Ethereum, it does not close the door on moving to an Ethereum layer two, as it would still enjoy the security that comes with the mainnet.
The proposal argued that few projects manage to move and thrive away from the Ethereum blockchain, suggesting that a future AIP could be used to implement such a move to scale to an l2.
Avalanche’s recent proposal
Towards the end of last month, as the ApeCoin community remains in limbo, Avalanche submitted a proposal suggesting that ApeCoin DAO set up as a subnet on its blockchain. While Avalanche Subnets promised limitless scalability and other pluses in gas fees and transaction throughput, the Ethereum inertia reigns supreme.
Fidelity is warming up to Ethereum, with custodial and trading plans
Tom Jessop, the president of Fidelity Digital Assets, has revealed that the Fidelity Investments subsidiary is working on plans to create infrastructure to allow it to offer custodial and trading services of Ethereum. It plans to complete 110 new tech hires by the end of the year.
Fidelity’s recruits will not only develop the infrastructure required to support Ethereum but will also shift all of the company’s platform data and apps to the cloud to facilitate speedier transactions. According to a report by the Wall Street Journal, Jessop said the company would hire an additional 100 customer service specialists to provide 24-hour trading support.
This onboarding of Ethereum comes barely a month after Fidelity introduced the option of Bitcoin exposure capped at 20% for 401 (k) retirement benefits accounts. Though the move faced resistance from the US Labor Department, Fidelity cited demand for crypto asset exposure from consumers.
Fidelity’s aggressive expansion strategy into digital assets continues despite a widely bear market. However, as Jessop clarified, the firm hasn’t felt much of the effects of the market volatility. Instead, he sees the only challenge going ahead being a slower pace of getting new clients. Fidelity Digital Assets currently has about 400 corporate clients, including asset managers, hedge funds, certified investment advisers, and pension funds.
Former BitMEX chief Arthur Hayes still expects ETH at $10k by year-end
Former CEO of troubled cryptocurrency exchange BitMEX Arthur Hayes has reasserted his prediction that Ethereum will hit $10k by the end of the year. In June 1 post, the controversial crypto figure reaffirmed his price target though he’s not so confident as reaching that price target in the said timeline is dependent on a political affair.
He also blamed UST’s recent decoupling from the dollar on a macroeconomic environment that resulted from the Fed’s decision to hike interest rates. Hayes explored a few matters around cryptocurrencies, and among them was the leading altcoin token, ETH. The former BitMEX executive, who has previously rightly predicted an ETH downtrend, said that he sees the market is either at or near the bottom of the cycle and expects recovery will begin once the Fed slows down its rate hikes.
Hayes based his projection on the assumption that the Fed will eventually halt its interest rate hikes owing to an increased discontent of the baby boomers. These are the wealthiest generation, and they control the most significant voting blocks, and as such, their discontent will definitely get heard towards the mid-terms this November. He expects the Federal Reserve lets loose of its tightened liquidity policy and trigger another bull run.
He also cautioned investors from jumping back in early, suggesting that they wait for the “all-clear signal” before considering swapping fiat for BTC/ ETH. All that is in the long-term.
In the short term, it is likely that Ethereum and the lead asset, Bitcoin, will see more volatility as they struggle to weather the prevailing bearish sentiment. From this standpoint, Hayes sees ETH trading as low as $1,300 and Bitcoin bottoming at $20,000.
He also expects the Fed’s hawkish stance to push into Q3 to result in the predicted downward pressure.
Terra – a victim of circumstances
In addition to his market prediction, Hayes also posited that Terra’s May downfall might have been caused by tightened liquidity, suggesting that the risk-off approach had caused investors to relinquish their LUNA holdings at once, causing the downward spiral.
He says the collapse was “pre-ordained because of how it was programmed,” arguing that what happened would have occurred anyway, even if it were months down the line as the Fed continues to tighten the liquidity environment.
To learn more about Ethereum visit our Investing in Ethereum guide.
Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.