- Ethereum transaction fees reach new ATH
- Ether DeFi sector managed to extend its momentum
- Tether issuance is another major factor behind the rise
Ethereum News Today – recent reports show that Ethereum’s transaction fees have skyrocketed to new all-time highs. This comes at a time when the DeFi sector has continued to extend its momentum. The transaction fees on Ethereum have seen an unprecedented increase in recent weeks. The major reason behind this is the skyrocketing demand for block space on Ethereum. The daily transaction fees users pay on the network have nearly doubled.
The previous peak point was during the ICO mania between late-2017 and early-2018. At the time the DeFi sector took center stage as it has now triggered a market-wide upward movement. Because more than half of the DeFi tokens are ERC-20s, users who transacting between tokens (on Uniswap to name a few) are struggling for block space.
The Current Bullish Cryptocurrency Trend May Continue
It appears the current upward price trend isn’t going to stop anytime soon as the DeFi sector’s massive growth isn’t showing signs of faltering. The crypto market’s upward action initially began after tokens in the DeFi industry began to see parabolic growth. This move helped to drive value to Ethereum. And in turn, it helped Bitcoin go higher.
The entire digital asset market is caught in a firm bullish trend. This is true for the cryptocurrencies that are under DeFi. As traders continue to cash in on the strength most of these cryptos have exhibited recently, the fees needed to complete transactions on Ethereum have surged to new all-time highs. According to a report published by Arcane Research, the daily transaction fees on ETH are sitting at double of what they were in the ICO mania between 2017-2018.
What Caused Ethereum’s Transaction Fees to rise?
Users swapping multiple ERC-20 tokens to trade on Uniswap as well as farm yields on different protocols are the key drivers behind the ongoing unprecedented rise in ETH transaction fees. The spike in Tether issuance is also another factor behind the rise in fees on ETH. While looking at the size of the DeFi industry, it appears growing adoption might continue to push Ether fees higher until the next network upgrade (ETH 2.0).
According to data from analysts, the aggregated DeFi sector has a current market cap of $13.7 billion. It is 28% higher than it was one week. If we exclude Chainlink from this number, the DeFi market cap will be just under $8 billion. This means there is still room for growth in the market and Ethereum’s transaction fees may continue to go higher in the coming months.