ETH Token Price on Testnet Skyrockets to $1.60 Due to Speculation

Following the launch of a bridge by LayerZero connecting with Ethereum’s mainnet, the price of ETH tokens on the Goerli testnet has surged due to speculation.

ETH Token Price on Testnet Skyrockets to $1.60 Due to Speculation

As reported by Coin68, the cross-chain project LayerZero recently introduced the Testnet Bridge, linking the Goerli testnet with Ethereum’s mainnet. This development included the issuance of a token representing ETH on the testnet, which can be swapped for real ETH.

LayerZero's rationale for this unprecedented move was the difficulty in obtaining ETH on the Goerli testnet, which was hindering developers' ability to test new solutions. By providing a swap pool, LayerZero aimed to allow developers to purchase testnet tokens, eliminating the need to wait for tokens via a faucet.

However, some in the Ethereum community criticized LayerZero for "monetizing" Goerli, arguing that ETH on the testnet should remain free and expressing concerns that users would now have financial incentives to hoard testnet tokens, exacerbating the token shortage issue.

As feared, speculators began trading Goerli testnet tokens, causing the price of gETH to spike to $1.60 over the weekend—16 times higher than the initial swap price set by LayerZero. In the following hours, the price of gETH corrected back to around $0.30 - $0.40.

Price volatility of Goerli ETH since the launch of LayerZero's Token Bridge. Source: Dexscreener

Polygon's Chief Security Officer, Mudit Gupta, expressed disappointment:

"This is the beginning of the end for Goerli. It has served us well."

Gupta attributed the price spike to speculation rather than genuine demand for testing on Goerli. He revealed that his faucet had distributed 6 million ETH on Goerli for free and processed over 100 billion RPC requests. However, due to the current situation, both activities have been halted.

[Read more: Archway]

Uniswap founder Hayden Adams, who collaborated with LayerZero to create the ETH testnet swap pool, also voiced concerns about the speculation. Despite this, he noted that as long as users continue to swap tokens on Uniswap, the DEX will benefit from additional trading fees.

Nonetheless, Ethereum developers are considering LayerZero’s feedback regarding access to testnet ETH and are discussing the creation of a new testnet called Holii to ensure fair distribution of testnet ETH.

On Goerli, several independent projects have emerged, including an NFT collection and a memecoin named Goerli Inu.