Ethereum (ETH) Crashes Under $1,800, Vitalik Buterin Demands DeFi Regulations

The world’s second largest cryptocurrency Ethereum (ETH) has come under intense selling pressure in the last 24 hours. The ETH price crashed more than 10% slipping under its crucial support of $1,800.

 

As of press time, ETH is trading at a price of $1,773 with a market cap of $213 billion. So far in 2022, Ethereum ETH has eroded 50% of its value while evaporating more than $200 billion of investors’ wealth.

 

The other metric to look at is the Ethereum gas fee which has dropped under $2.5 earlier this week. This is for the first time since July 2021 that the ETH gas fee has dropped this low. The extreme low fee levels indicate a very minimal activity while hinting further at stagnancy and fear.

 

The today’s ETH price crash comes amid the broader market sell-off. However, a general observation is that crypto projects linked to the decentralized finance (DeFi) space have tanked the most. Along with Ethereum (ETH), projects like Avalanche, Solana and Polkadot have tanked the most and are down anywhere between 10-20%.

 

The collapse of the Terra ecosystem earlier this week has left a major impact on the market leading a major bearish sentiment in the broader market. As a result, DeFi players across other blockchain networks have also turned a lot more skeptical. As Bloomberg explains: “DeFi developers are dusting themselves off after Terra’s collapse halved the sector’s total value, and dampened markets aren’t going to help in convincing them that now’s the time to get back in the game”. 

 

On the other hand, Ethereum founder Vitalik Buterin has recently lashed out at the DeFi model by Terra. In his recent interview to Bloomberg, Buterin said that there’s no realistic investment that can give anywhere close 20% annual returns which was one of the main attractions of Terra’s UST stablecoin.

 

Thus, Buterin said that he wanted a greater level of scrutiny in the DeFi financial mechanisms. He added: The greater level of scrutiny on defi financial mechanisms, especially those that try very hard to optimize for ‘capital efficiency’, is highly welcome. The greater acknowledgment that present performance is no guarantee of future returns (or even future lack-of-total-collapse) is even more welcome.”