The Protocol: Friend.tech Fades as Crypto Craze, but Ethereum Is Scaling

This week in blockchain tech: Polygon's new "chain development kit," Farcaster's move to Optimism, Shibarium's return and Interlay's new Bitcoin layer-2 network, and Pancake Swap expands to Consensys's Linea.

Timeline of Ethereum

Since the beginning of the year, Circle and its USDC stablecoin have seen a decrease in dominance on the Ethereum blockchain reflecting a downsizing for the cryptocurrency pegged to the value of the dollar.

Friend.tech, Crypto's latest fad, didn't drive up congestion and fees on Ethereum the way frenzies have in the past – possibly a sign that the blockchain's efforts to scale by fostering supplemental "layer-2" networks, like Coinbase's new Base, are bearing fruit.

Ethereum has rapidly become the second most valuable cryptocurrency after Bitcoin. With its recent transition to a proof-of-stake consensus model and its expanded capabilities, Ethereum's future looks bright.

Bitcoin (CRYPTO: BTC) moved higher, with the cryptocurrency prices trading above the $27,000 level on Wednesday. Ethereum (CRYPTO: ETH), also recorded gains, trading above the key $1,700 mark this morning.

Ethereum client Nethermind on Wednesday said it has released an update for validators clients and node operators to effectively update to the upcoming Holesky testnet. Meanwhile, Ethereum clients have started offering updates in response to the Holesky testnet launch on September 15, which marks a significant step in Ethereum's evolution.

ETH price reacted to Grayscale Investments' triumph over the Securities and Exchange Commission (SEC) on Tuesday, climbing from support at $1,630 to highs above the resistance at $1,700. A new weekly high was achieved at $1,740 before the momentum waned allowing the ongoing retracement at $1,715.

Following on the heels of the goals set with Polygon 2.0, the Polygon Labs team expands its presence even further in the world of Ethereum-based zk blockchains by launching the Chain Development Kit (CDK).

Large holders of Ethereum (ETH) have displayed bearish behavior on the second-largest crypto asset by market cap since around April, according to Santiment. Santiment's director of marketing Brian Quinlivan says that addresses holding between 10 and 10,000 ETH turned bearish around April, a contrast to their bullish stance witnessed in the fourth quarter of 2022.

A crypto market analyst at Bloomberg Intelligence thinks it's already “pretty clear” that Ethereum (ETH) will win the “upcoming stablecoin wars.” Jamie Coutts says on the social media platform X that Ethereum and its broader ecosystem, including layer-2 projects like Optimism (OP), Base and Arbitrum (ARB), leads all other alternative networks across most network-adoption metrics.

Grayscale's victory over the US Securities and Exchange Commission (SEC) on August 29 effectively ended a negative Ethereum (ETH) market trend. As a result, the price of ETH rose from a 24-hour low of $1,638.13 to a new 7-day high of $1,742.64 before hitting resistance.