Transaction fees, volumes and amounts transacted have decreased considerably in the past three weeks.
- Transaction fees earned by Ethereum miners have fallen by more than 85% in under three weeks.
- A smaller decrease has been observed in the total number of Ethereum transactions.
- The total number of ETH sent has also dropped by 74%.
Ethereum's average transaction fee (ETH) peaked at almost $ 12 last month, causing a major pain point for merchants and other ETH users. As a result, Ethereum miners have been accumulating record fees, earning a total of $166 million from transaction fees in September alone.
But now, things are back to normal. According to Glassnode data, the total Ethereum transaction fees earned by miners fell from a peak of 42,763 ETH on September 17, to 5,898 yesterday - equivalent to an 86.2% drop in less than three weeks.
In turn, the average transaction fee fell to a similar degree and dropped from a September 17 peak of $11.62 to $2.1 from yesterday. This makes the Ethereum blockchain cheaper to use.
It is not just transaction fees that have dropped dramatically in recent weeks. The absolute number of transactions on the Ethereum network also dropped considerably to reach 935,000 yesterday - 29.2% less since it peaked at 1.32 million in 2020 on September 17.
The total amount traded decreased even more. It fell from 6.5 million ETH on September 17 to 1.7 million ETH yesterday - a 74% drop.
The rate increases seen between June and September are largely due to the rapidly expanding interest in the decentralized finance industry (DeFi), which has seen platforms such as Uniswap, Curve, Aave, and several income projects like YAM, calling for attention. Since the Ethereum network is only able to process a limited number of transactions in each block, and can only handle about 10-14 transactions per second, competition for block space has increased dramatically leading to a gas war between those who needed their transaction to be confirmed quickly.
Now, the hype surrounding DeFi projects has eased somewhat and most of the major DeFi currencies have been at a staggering loss in the past week, including Uniswap (-27.6%), Yearn Finance (-41.2%), and UMA ( -28.5%). This should give Ethereum some much-needed breathing space.