UniLogin, an Ethereum onboarding solution, is terminating its service due to the network’s rising transaction fees.
“Some days the whole process of onboarding a new user was costing over $130!” said UniLogin founder Alex Van de Sande. These costs have made it unfeasible for the company to continue operating and has “changed the game significantly enough that we don’t see a way forward with the project,” according to Van de Sande.
What is UniLogin?
“UniLogin started two years ago with a vision for a Universal Login standard for Ethereum, a way to onboard new users to Ethereum directly from the browser, using smart accounts and abstracting away all the gas,” said Van de Sande in the official announcement. “While the idea was very well received by the community (we packed the second largest stage at Devcon 2018), we made some bets on a few assumptions that turned out to be untrue.”
Among these incorrect assumptions, the UniLogin team assumed that (1.) Scalability wouldn’t be a problem—which we know is not true because network bottlenecks increase the price of transaction fees which ultimately led to UniLogin shutting down. And that (2.) Ethereum is meant for everybody.
with transaction fees this high, #Ethereum is undergoing gentrification
de-finance bros pricing out the artists and futurists to yield farm, ponzi, and leverage long shitcoins
soon it will only be finance bros left
kinda boring tbh 😐
— ameen (@ameensol) August 11, 2020
“At the moment Ethereum has been going through a process of gentrification, where big DeFi users are pricing out all other usage of the network. Games, NFTs, DAOs, and many other exciting use cases are simply inaccessible at the cost of multiple dollars per transaction,” said Van de Sande.
What’s next for UniLogin?
UniLogin plans to return their remaining cash to their investors and cease operations, and its current team plans to join EthWorks.io to continue working on Ethereum.
The UniLogin shut down is unfortunate, but most likely, the inevitable end that all Ethereum-based companies will meet. Because the Ethereum network cannot scale, and transaction fees continually climb higher, consumers are often priced out of any Ethereum-based applications. That being said, the Ethereum network is inefficient when it comes to making transactions (the average ETH tx fee is $3.48) and will typically cost consumers more than it would if they were looking to make a transaction with fiat.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.