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Over the summer months, Ethereum’s transaction fees have heated up, causing the DeFi trend and Uniswap token trading boom to finally run out. But as transaction fees start to rise again after a period of inactivity and downtrend, could it be a sign that another phase of DeFi domination is about to begin?
DeFi helps drive Ethereum to 350% ROI in 2020, with more on the way
Ethereum grew more than 350% in 2020, even beating ultra-bullish Bitcoin in its own game. Altcoin saw explosive growth to start the year in the wake of total value locked in DeFi applications turning parabolic.
As millions, and eventually billions, poured into DeFi, Ethereum was at the center of it all. ERC20 tokens built on cryptocurrency smart contracts have enabled applications that mimic traditional banks, such as loans and lending.
Related reading | Dominance of bitcoin and the dollar: five factors behind the current altcoin season
The token exchange on decentralized exchanges and automated market-making platforms also contributed to the momentum, bringing the dawn to platforms such as Uniswap.
Ethereum at the peak reached 390% year to date returns on the heels of DeFi | Source: ETHUSD on TradingView.com
As all of this required Ether to pay gas tariffs, Ethereum’s price followed the parabolic trajectory set by TVL. But this summer, fresh-baked food tokens with little or no value and outright scams have begun to tarnish the budding fintech trend.
However, as Bitcoin approaches a new all-time high, there are some early signs that another wave of interest in DeFi is brewing.
Decentralized Finance Rebuilding or Rising Commissions Due to ETH 2.0?
Second to a cryptographic analyst, Ethereum transaction fees are picking up again after a period of stagnation. As DeFi token prices were dropping and all eyes on Bitcoin, users have stopped moving between tokens between wallets or DeFi applications.
ETH gas fees are rising again for the first time since the downtrend began | Source: Etherscan.io
But with the recovery, another DeFi season could happen in a larger “alternative season” altcoin market.
An altcoin season is long overdue in cryptocurrencies, with most altcoins still significantly below their all-time high prices, while Bitcoin is just a few dollars off its own.
Related reading | Here’s what will happen to altcoins once Bitcoin is over $ 20,000
And as Bitcoin’s price per coin rises, the trend of investors looking for cheaper altcoins for profits or investing in the profits of BTC, altcoin and DeFi tokens is likely to explode much more intensely than in the summer months.
Only time will tell if the rise in ETH transactions was the trigger, and in hindsight, if it was, it could be a useful tool for analysts to pay attention to subsequent corrections for when DeFi resumes.
Another theory indicates that the movement is due to the arrival of new crypto users and the transfer of Ether in preparation for ETH 2.0. Is another DeFi season around the corner?
Featured image from Deposit Photos, Charts from TradingView.com
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