The UniLogin service, which simplifies access to Ethereum applications, announced its closure due to rising transaction fees on the network.
“The current Ethereum gas market, the growth of DeFi and new browser standards have changed the game so much that we do not see a future for this project,” — stated in a Medium post by UniLogin founder Alex Van de Sande.
UniLogin proved particularly sensitive to gas price due to the project’s operational nuances. Before onboarding the service created a new wallet with multiple signatures on behalf of users, registered a name in the Ethereum Name Service, and in some cases added Dai transactions. Accordingly, each new login required a separate on-chain transaction to add a new key.
According to Van de Sande, each such transaction was costly for the company. It had reached the point where onboarding a single new user cost the platform more than $130. This meant that the cost of registration on UniLogin was comparable to that of a hardware wallet.
The founder of UniLogin noted that he does not see this as a temporary problem, even if the gas situation improves. In his words, operating Ethereum applications with a large number of users will still be too costly.
Having studied possible options, UniLogin’s founders decided to shut down the project and return funds to investors. The relays will operate until the end of the year, so users can migrate their interfaces and funds to another platform.
One of the reasons for the short-term spike in transaction fees could be the launch of the UNI token on the Uniswap exchange, amid which on-chain activity on the Ethereum network surged.
As of September 1, the average Ethereum network fee surpassed $10, with the cryptocurrency price rising to around $470.
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