- Ethereum Transaction Fees Fall 82%, as Defi Hype Eases
- ETH transaction fees fell from $11.61 on September 2 to $2.09 on October 4
- Miners have seen a corresponding drop in total earnings on Ethereum
Ethereum News Today – it appears Ethereum’s users can now smile a bit. According to recent reports, the average cost of completing transactions on the Ethereum network has dropped by 82%. It was $11.61 on September 1 but is now down to $2.09 on October 4. The drop may have been triggered by a decline in the hype surrounding DeFi (decentralized finance) protocols.
According to Glassnode’s data, Ethereum’s miners have seen a corresponding drop in their total earnings from fees in the last three weeks. As of September 17, miners made 42,763 ETH ($14.97 million) in fees. However, as of October 4, that figure dropped to 5,898 ETH ($2.06 million). Fees are a percentage of the total revenue of miners. They plunged to 29% from a whopping 69% in the same period.
Miners Made $500,000 in Profits in One Hour on September 1
Transaction fees rose so high that at September 1, miners made a profit of $500,000 in only one hour. Meanwhile, in August alone, ETH miners made a whopping $113 million in profits. This figure is a 3,660% high from the $3 million that was earned back in April this year. Compared to the average cost of transactions (of $0.09) in April, the current fees remain on the high side. Meaning, the latest decline didn’t have much impact.
According to Glassnode, the total number of transactions on Ethereum fell by 30% to 935,000 as of October 4. This means it went down from the (2020) high of 1.32 million three weeks back. Analysts have attributed the spike in transaction costs on Ethereum to the hype in the DeFi space. The DeFi sector is now a $9 billion industry in only three months. In July, about $2 billion in value was locked in the defi market.
Developers on Ethereum are Looking for Viable Solutions
As defi protocols like Uniswap (UNI), Compound (COMP), Balancer (BAL), Yearn.finance (YFI), and Curve.finance (CRV) compete for block space to process transactions on Ethereum’s network, the fees went high. Etherscan data shows that protocols like Uniswap are among the few solutions with the highest usage on the network. Tether (USDT), YFI, and sushiswap complete the list.
Now, the hype may have cooled off to an extent. Major defi products have dropped by 30% and 45% over the last seven days. ETH developers have been testing solutions to cut down transaction costs on the network and improve efficiency. Soon the network upgrade known as Ethereum 2.0 will go live. Although the project is still months away from launch.