2024, The Dark Year For Ethereum? Unichain Threatens To Undermine The ETH Crypto

For the past few months, Ethereum’s crypto has not been at its best. And it seems like things are only getting worse for ETH. The recent announcement by Uniswap to migrate to its own network, Unichain, could lead to a significant decline in Ethereum network activity. While some indicators point to a ‘bearish’ trend for 2024, the launch of Unichain could well be the final blow for the second-largest crypto on the market.

The future of Ethereum threatened by the launch of Unichain

The launch of Unichain – a crypto solution that could eclipse all Layers 2 – by Uniswap further undermines the economy of Ethereum. Indeed, Uniswap, once the flagship of DeFi platforms on Ethereum, will now use a distinct fee mechanism. Transactions on Unichain will allow Uniswap to earn significant income through gas and MEV fees.

This means that these financial flows, previously reserved for Ethereum, will now be captured by Unichain, further weakening the ETH network.

Unichain is another confirmation of $ETH being a bearish asset in 2024🩸
Today we learnt news about @Uniswap's next steps moving from not just the application layer, to now a rollup as part of the @Optimism superchain.

Why would Uniswap want to be a chain?
When transacting on… https://t.co/AOYrHaOBdV pic.twitter.com/GynKa0pa33

— Wajahat Mughal (@0xMughal) October 10, 2024

The expert Wajahat Mughal clearly stated on X: “Unichain is just another proof of Ethereum’s ‘bearish’ state in 2024“.

If the most important DeFi application in terms of revenue leaves the ship to manage its own financial flows, it raises a major question: what does the future hold for Ethereum? How to buy Ethereum?

• Less activity on Layer 1;
• Fewer transactions in GWEI;
• Drastic reduction in cash flows.

ETH crypto faces major development challenges

With the rise of competing networks like Unichain, Ethereum is gradually losing its status as ‘Ultra Sound Money’. This concept, introduced after the implementation of the EIP-1559 proposal, was theoretically supposed to make ETH deflationary.

However, since April 2024, Ethereum’s supply is increasing again, even recording its longest inflationary period since the transition to PoS consensus in September 2022.

Analysts are concerned about other protocols following Uniswap’s lead and leaving Ethereum’s Layer 1, thus plunging the network into a downward spiral.

For ETH crypto to survive, it must not only rethink its economic model but also propose new narratives capable of attracting investors and users in the face of these major changes.

However, a week ago, analyst Benjamen Cowen had already predicted a 50% correction for Ethereum’s crypto. The launch of Unichain only confirms this trend.