Ethereum transaction fees are now nearly double that seen at the peak of the ICO mania in late-2017
In recent weeks, Ethereum transaction fees have grown significantly and stemmed from user demand. Specifically, transaction fees almost doubled compared to the peak of the ICO craze in late 2017 and early 2018. In which, the decentralized financial sector occupies a central position in the rising trend that takes place in the whole market.
Ethereum transaction fees skyrocketed to new highs
Because nearly all DeFi tokens are ERC-20, users trading between tokens on platforms like Uniswap is in strong competition. As a result, this has resulted in higher fees. It seems that this trend will soon disappear as DeFi’s boom in growth shows no sign of faltering.
The ongoing uptrend of the crypto market started for the first time after tokens in the DeFi sector began to see parabolic growth. This has helped drive value to Ethereum, which in turn drives the price of Bitcoin higher.
The entire crypto market is currently in a solid uptrend. This is especially true for digital assets in the DeFi category. As traders moved to monetize the power of many of these cryptocurrencies at the end of the year, the fees required to complete transactions on the Ethereum Blockchain rose to new highs.
According to a recent report from Arcane Research, daily ETH transaction fees are now almost double what they were during the ICO period a few years ago.
The report states:
“The daily Ethereum transaction fees topped out on $8.1 million last week. That is 4x the levels seen at the beginning of August, which in itself were abnormally high levels… This is 66% higher than the previous all-time high from January 2018. However, back then the ETH price was well above $1300 and just a few days away from ATH.”
Users swapping tokens between different ERC-20s for trading on Uniswap or dividends on different protocols is the main reason behind these unprecedented ETH fees.
However, the Tether continually printing more money is also another factor contributing to this. While moving towards the current size of the DeFi sector, it looks like increasing adoption could continue to push Ethereum fees higher until a Blockchain upgrade – like ETH 2.0 – is made.
The current market capitalization of the DeFi sector aggregate is $ 13.7 billion. This is 28% higher than just a week ago. If Chainlink is excluded from this number, then the current market cap is under $ 8 billion.
As a result, this market segment still has plenty of room for growth, which means Ethereum transaction fees could continue to rise over the coming months.
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