Ethereum transactions fee revenue reached a new low level in a year while the miner revenue increased during the DeFi summer so let’s see what could have been the reason in our latest Ethereum news today.
As the network congestion eased, transaction fees dropped and the blockchain that garnered competition from networks is taking aim at the high rates of the congestion and fees in double digits which are swinging in another direction. Glassnode wrote on the matter:
“We have to look as far back as June 2020, before ‘DeFi Summer’, to find similar levels of transaction fees paid.”
The Miner revenue from transaction fees dropped by more than 85% from 15,000 ETH per day which was a little over a month ago as per the reports from Glassnode. The seven-day average is now sitting at 1900 ETH as Glassnode noted. That was the same month Defi lending protocol Compound released its COMP governance token and kicked off the Defi summer as well as spur demand for products that allowed people to lend, swap, or borrow assets with each other instead of going through a bank or similar intermediary. Most DeFi protocols use Ethereum’s infrastructure which increased the popularity of the network while also increasing the congestion.
The transaction fees are rising along with demand for the network and the more demand there is to push through the transactions, the less free space there is for more transactions to be included in a block. As a result, the transaction fees are going up and when there’s more space, fees go down. There’s even more space available because Defi activity waned and Glassnode wrote that the recent month has been historical of a larger decline. Back in June, about $1-2 billion in value was hovering on the ETH-based Defi protocols per data from DeFi pulse. The number is known “as the total value locked” hit over $50 billion but the TVL was as high as $86 billion on May 11 which is only a day after Ethereum reached an ATH of $4165.
The Ethereum transactions fee revenue dropped as ETH did over the weekend below $2000 while the network’s miners are being hit with low fees and low exchange rates. According to the data by BitInfoCharts, the average transaction fee on June 20 was $3.50, and back in May was $69.92 which hasn’t happened yet to be as low since January 1.
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