- Ethereum will be removed from Paxful, according to Paxful’s CEO announcement.
- Critical statistics show that ETH remains largely unaffected despite the removal.
New information suggests so Ethereum (ETH) is being removed from a cryptocurrency trading platform. Paxful’s CEO announced on December 21 the removal of the second largest cryptocurrency by market size. He gave three main reasons for the decision. Is there any truth to these claims, and what are they?
According to a statement released by Paxful CEO Ray Youssef on December 21, the peer-to-peer cryptocurrency exchange Ethereum (ETH) would delist on December 22.
The initial justification offered was that Ethereum was moving from a PoW to a PoS consensus. Youssef argued that the POS transition had transformed ETH into a “digital form of fiat”. The other factors were that there were a lot of scam tokens on Ethereum and it had become too centralized.
Are the factors a hit or a miss?
When the Ethereum mainnet transitioned, it was validators, not miners, who were responsible for confirming and adding transactions to the blockchain.
As miners are rewarded for their efforts to secure a network, so are validators.
However, there is a high barrier to entry to become a validator, which led to the creation of staking pools. At the time of writing, four entities controlled more than 56% of the stake ETH pool, according to data from Dune analytics.
Ethereum’s newfound reputation as a centralized network was mainly due to the dominance of these entities.
Read Ethereum (ETH) Price Forecast 2022-2023
Another effect of centralizing these pools and consequently validators was that most newly added blocks became OFAC compliant. Blocks that comply with OFAC regulations ensure that they do not allow transactions involving people or organizations sanctioned by the agency.
This implied that government agencies could approve and interfere with Ethereum transactions. Even if the government wants to impose rules Ethereum users, it could penalize the big entities quickly. Mevwatch stats showed that 58% of Ethereum blocks were currently OFAC compliant.
Despite Paxful’s CEO’s reservations, the move can be considered a good idea for many reasons.
Well, one of the reasons is that Ethereum remains a critical part of the decentralized finance (DeFi) framework. Most of the protocols and stablecoins, some of which are still available on the p2p market, are developed on the platform.
DApps on the Ethereum blockchain and to a lesser extent ETH are mainly responsible for the current state of the cryptocurrency market. Could this decision by Paxful affect the price of Ethereum?
Daily active address remains normal
The daily active address data for Ethereum revealed nothing unexpected as they appeared normal. The number of daily active addresses visible at the time of writing already exceeded 188,000.
Given the data from the previous days, there was a tendency for that figure to more than double while trading time was still quite active.
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ETH in a daily time frame
There was no impact on Ethereum’s price movement, as evidenced by a daily look at it. The asset was still trading in the $1200 range with no discernible price rise or fall.
The volume indicator also showed that there was no significant increase or decrease in sales or purchasing pressure. The signal (yellow) and -DI line (red) above 20 on the Directional Index statistic also showed that the overall trend was still bearish.