Cryptocurrencies

0x Price Hits Two-Year High on Hopes Falling Ethereum Fees Will Spur DEX Trading

(CoinDesk)

Hopes the bottleneck on the Ethereum blockchain might now ease have sent tokens associated with decentralized exchanges – known as DEX tokens – soaring, with the token of the 0x exchange (ZRX) rallying to a two-year high on Friday.

  • CoinDesk data shows ZRX surged 40% from $0.61 to $0.97 – the highest level since October 2018 – in early morning trading.
  • The rise comes just days after stablecoin provider Tether made plans to launch its USDT token on layer-2 scaling solution OMG Network and take some of the load off Ethereum.
  • As most decentralized exchanges run on Ethereum, this is good news for the exchanges and their tokens.
  • For example, analysts hope Tether’s move will bring down average transaction fees, which recently reached a record high of $6 last week.
  • Ethereum-based DEXs like 0x and also Kyber Network (KNC) are vulnerable to network congestion on Ethereum as high fees reduce trading activity.
  • “Any reduction in ETH transaction costs due to tether’s migration on the OMG network is a huge win for DEX trading,” Denis Vinokourov, head of research for crypto prime broker Bequant, told CoinDesk in a Telegram chat. 
  • While KNC is only up by 3% it has also surged 900% year to date. Other prominent DEX coins such as Aave’s LEND have gained 3,000%, while ZRX has increased by 300% YTD.
  • ZRX may, therefore, be catching up with its peers as it still has plenty of ground to cover, Vinokourov said.
  • Glassnode data shows that as of Thursday, the mean fee per Ethereum transaction was $3.17 – significantly higher than the $0.55 seen in July.

See also: DEX Aggregator 1inch Raises $2.8M From Binance Labs, Galaxy Digital and More

  • It remains to be seen whether Ethereum fees will fall back to July levels – this uncertainty may help explain why the ZRX price has pulled back to $0.75 just as CoinDesk was going to press.

See also: DEX Aggregator 1inch Raises $2.8M From Binance Labs, Galaxy Digital and More

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CoinDesk is the leading digital media, events and information services company for the crypto asset and blockchain technology community. Its mandate is to inform, educate and connect the global community as the authoritative daily news provider dedicated to chronicling the space. Founded in May 2013, CoinDesk reaches millions interested in blockchain technology thru its website, social media, newsletters, podcasts and video. CoinDesk created the original reference rate known as the Bitcoin Price Index which is widely sourced in the media including The Wall Street Journal, Financial Times, CNBC and many others on a daily basis.

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