Prices of Goerli ether (gETH) spiked to over $1.60 over the weekend, rising from 7 cents Friday and reaching a market capitalization of as much as $15 million.
Data from DEXTools shows that nearly a million dollars worth of gETH was traded in the past 24 hours, with 3.79 million total gETH in circulation and 1,260 token holders at press time.
But goerli ether is no trendy Ethereum fork or an Ethereum rival marked up by hype men: These tokens are a testnet version of actual ether for developers to simulate transactions, smart contacts, and other activities prior to deploying on the Ethereum mainnet. This means that these tokens are supposed to be free – issued simply for testnet developers.
As such, the gETH price spike has ended up attracting criticism from the crypto community.
“Testnet ether is supposed to be free but is being marked up by speculators,” well-known developer Mudit Gupta said in a tweet on Sunday. “Keyboard warriors will tell you that the developers are buying it but no, they are not. Maybe 0.1% are buying for consumption.”
“This is the start of the end of Goerli testnet. It served us well,” he added.
Testnets are a testing environment that mimics real-world blockchain usage, allowing developers to find and patch critical bugs for upcoming products or features meant to be deployed on the mainnet.
This prevents unintended damage that could potentially lead to monetary losses or a technology breakdown.
The gETH market bunged into existence earlier this month after the cross-chain trading platform LayerZero created a swap product that allowed developers to purchase the testnet ether directly from the decentralized exchange Uniswap.
LayerZero wanted to create a market that made it significantly easier for Ethereum developers to test and have access to ether on the Goerli testnet.
Developers and users have, so far, had to rely on services called faucets to gain testnet tokens, which isn’t a straightforward process.
The tokens were initially priced at 10 cents apiece and were listed on Uniswap on Feb. 22. When a user purchased the tokens on Uniswap, a series of swaps between ether and goerli ether were conducted on both the Goerli testnet and Ethereum mainnet – resulting in the native ether on Ethereum to ether on Goerli.
But markets attract speculators, and more so in the crypto world. For some on Crypto Twitter, betting on gETH is a way to invest in the base roots of applications supposed to later be built on Ethereum – a sort of leveraged bet on ether.
Speculators are having fun while at it. As of Monday, there’s already a non-fungible token (NFT) collection built on the Goerli network, as well as a Shiba Inu-themed goerli inu meme coin.
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