Ethereum Miners Earn Over $500,000 In Transaction Fees As DeFi Continues To Boom
Ethereum miners earned over $500,000 USD in transaction fees over the course of an hour as gas fees hit new heights on Tuesday, September 1, Glassnode data shows.
As Ethereum’s price has continued to rally, miners have been turning a profit on the increased activity. At the time of writing the second largest cryptocurrency is trading hands two dollars below its 2020 price high at $486 and is up 11.80%. The rally may be due to the launch of a new Uniswap fork, Sushiswap which secured $1 billion total value over the course of a day.
Inflated Ethereum fees grabbed headlines three weeks ago after they shot up by 53.2% over the course of 24 hours. The spike in cost came on the same day as a trending new DeFi project YAM launched. Over recent weeks another DeFi project built on Ethereum, Yearn.finance, has seen similar stellar performane with the protocol’s governance token’s price tag rapidly growing to exceed $30,000. As yield farming grows in popularity and other developers look to Ethereum to build their projects the network is struggling to keep up with demand.
As congestion on the network grows, the number of unconfirmed transactions begins to pile up, wait times get longer, and the cost of building on the blockchain becomes untenable. While the popularity of DeFi drives Ether’s price upwards, it could come fade if the network is not able to adapt.
The fees are less problematic for those carrying out large transactions, but for smaller transactions the fees are so high that the network isn’t worth using. A recent Santiment report stated that out of 855 crypto assets tracked, 727 have 50% or more of their total supply being held by only 100 wallets. Lowering transaction fees on the networks will be crucial to encouraging mainstream adoption of the technology. Ethereum co-founder Vitalik Buterin directed those angry with the high transaction fees to the various second-layer options for those looking to execute smaller transactions in a recent tweet.
The most popular of these solutions is the OMG network which recently supported the migration of popular stablecoin and gas guzzler Tether to allow for cheaper USDT transactions.
By Emily Mason
