DeFi Market Rally Pushes Ethereum Gas Fee to 20-Month Highs as ETH Price pushes to $425
The Decentralized Finance (DeFi) market is seeing massive surge over the last few months. With a majority of the DeFi located on the Ethereum blockchain network, the DeFi transaction volumes are skyrocketing thereby congesting the Ethereum blockchain.
As per the latest market data from Etherscan and Glassnode, the Ethereum hash rate has hit a 20-month thereby the taking the transaction fee even higher. The hashrate is the way we measure how much computing power everyone around the world is contributing toward mining the cryptocurrency and validating transactions.
The Ethereum hashrate has currently reached its 20-month high at around 201,000,000 GH/s. This explosive increase in the hashrate and the gas fee is heavily influenced by the rapid DeFi sector growth.
Especially, since mid-June the demand for ETH has increased massively as more number of users are using the DeFi platforms leading to the Ethereum network congestion. The surging hashrate the rising fee on the Ethereum network simply indicate the surge in the user activity on the Ethereum blockchain.
Moreover, during the times of network congestions users usually compete against each other by attaching a higher gas cost or transaction fee. A higher gas fee means higher revenue for the ETH miners.
The higher gas fee usually attracts more miners to join the platform which ultimately leads to further increase in the hashrate. The Glassnode researchers said that the Ethereum fee has recently reached an all-time high at 18%.
They wrote: “Miner revenue from fees on Ethereum has skyrocketed in the past two months, reaching an all-time high of around 18% (30d moving average). Conversely, this has brought the Fee Ratio Multiple (FRM) to lows never seen before on Ethereum. Created by Teo Leibowitz , the Fee Ratio Multiple (FRM) is defined as the ratio between the total miner revenue and transaction fees. FRM indicates how secure a chain is once block rewards disappear.”
The rising user activity on the Ethereum blockchain has also led many analysts believe that ETH price would surge going ahead. Currently, ETH price is swinging around $400. At press time, Ethereum ETH is trading for a price of $425 with a market cap of $48 billion.
With this, ETH is trading at 200% gains year-to-date, certainly more than twice of Bitcoin. On the other hand, the Ethereum developers team is working on the launch of the ETH 2.0 platform which offers higher scalability. The team had a successful testnet launch earlier this month.