Why are investors withdrawing ETH from exchanges?
The exodus of Ether from exchanges could be attributed to several factors:
- Greater security: many investors prefer to hold their cryptocurrencies in private wallets to reduce the risk of hacker attacks or losses due to technical issues of the exchanges.
- Growth prospects: with the reduction of supply on exchanges, some traders might expect a price increase, preferring to keep assets in cold storage in anticipation of future revaluations.
- Long term and staking: the Ethereum model based on staking through Proof of Stake (PoS) encourages many ETH holders to transfer their tokens to dedicated platforms to earn rewards instead of leaving them inactive on exchanges.
The Dollar Index, on the other hand, is still far from the peaks of January, but it seems to have interrupted the declining phase that lasted from January 11 to March 18, although with some partial intermediate interruptions.
All this suggests that the downward trend of yesterday and today of Bitcoin might not have ended yet, and that this could also drag Ethereum along.
Ethereum Dencun and the emerging risks of transient storage
Thehard fork Dencun, activated on the Ethereum mainnet in March 2024, introduced new features to improve scalability, including transient storage. This allows for temporary on-chain data writing with lower gas consumption, but also involves new attack surfaces.
According to the researcher SupLabsYi of Supremacy, this attack represents one of the first direct exploits related to the new architecture:
“It is not just an error in the callback function, but a wake-up call on the very use of transient storage.”
The problem, according to several analysts, is that transient storage does not retain data between transactions, but it can be accessible within a single transaction execution, opening unpredictable scenarios if poorly implemented.
The advantages of Celo’s transition to Layer-2 and the role of Ethereum
Optimistic rollups represent one of the main solutions for blockchain scalability. This mechanism aggregates multiple transactions outside the main chain to reduce congestion and lower fees.
The operation is based on the assumption that all transactions are valid, unless they are challenged by a fraud proof.
According to Marek Olszewski, CEO of cLabs, the developer of Celo, the migration to the new infrastructure involves significant improvements.
He explained that Celo transactions now inherit the economic security and decentralization of Ethereum, in addition to offering one-second block times and almost instant confirmations.
This integration with Optimism technology greatly simplifies the code and optimizes network security.
Olszewski highlighted how the new configuration allowed for the elimination of approximately 365,000 lines of code, reducing the attack surface and contributing to a more efficient, rapid, and secure codebase.
One of the main reasons behind the decision to migrate to an Ethereum layer-2 is the possibility of leveraging the advantages derived from the network effects of the Ethereum blockchain.
The fondatore del protocollo di rollup Interstate, Irfan Shaik, highlighted that Ethereum offers the più grande pool di liquidità nel settore.
Blockchains that suffer from liquidity fragmentation, such as alternative layer-1s, can greatly benefit from connecting directly to Ethereum’s liquidity.
Olszewski also emphasized that the transition to the OP tech stack increases synergy with the Ethereum ecosystem, improving the composability between applications and protocols.
This means that Celo developers now have facilitated access to tools, resources, and established connections within the Ethereum universe.
A crucial aspect of the transition is the maintenance of Celo’s blockchain history, which covers almost five years of activity. Everything was carried out in a trustless manner, maintaining the integrity and reliability of the network.
Ethereum Blockchain in crisis?
Despite this, over time the real great success of Ethereum has been to enable the launch of many tokens on the crypto markets, starting from the ICO boom of 2018 and passing through the memecoin boom of 2021.
For example, SHIB of Shiba Inu was launched as a token on Ethereum.
Starting from 2023, however, Ethereum began to face competition from Solana from this point of view, so much so that now it is mainly on Solana that new tokens are launched.
The fact is that on Solana it is so much simpler, cheaper, and faster to launch a token that it has made this activity accessible to practically everyone. Ethereum, on the other hand, has fallen a bit behind in this regard.
The symbol of this handover was the launch of Donald Trump’s official token, on January 18 of this year, launched specifically on the Solana blockchain and not on that of Ethereum.
Despite this, the number of average daily transactions recorded on the Ethereum blockchain does not appear to be in decline.
During 2021, this number had settled well above the one million mark, and in 2023 it had settled around this level.
While Solana was stealing the role of leader of memecoins from Ethereum, between 2024 and 2025, the number of average daily transactions recorded on the latter blockchain rose first above 1.1 million, and then also above 1.2 million.
Not even with the downturn of 2025 has it returned to a million, so from a technical standpoint, the Ethereum blockchain does not seem to be in a bear market at all.
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