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The Ether miner’s (ETH) revenue skyrocketed during the month of September according to data from glassnode, an onchain analytics resource. Although the price of Ether has not increased significantly during this period, miners on the Ethereum network have seen their revenue increase due to the high fees.
The miners took home 450,089 ETH in commissions ($ 168.7 million) and this represents a 39% increase over last month when miners earned around $ 113 million in commissions.
During the same period, revenue from Bitcoin miners’ fees not only paled in comparison, but actually decreased. BTC miners earned $ 26 million in September, a 50% decrease from the $ 39 million they earned in August. According to data from cryptocurrency mining pool F2Pool, it is now three times more profitable to mine Ether than Bitcoin
The sharp rise in revenue for Ether miners comes from activity in the decentralized finance industry which peaked in September and caused transaction fee prices to skyrocket on several occasions.
DeFi is great for farmers and miners
DeFi has not only revealed a powerful use case for Ethereum, it has also created a renewed demand for Ether to be used as a gas to pay for smart transactions and contracts. All of these factors pushed Ether’s price forward into 2020, allowing it to outperform Bitcoin by a significant margin.
Furthermore, a significant amount of BTC has flowed into the Ethereum blockchain in the form of WBTC and RenBTC, further increasing activity on Ethereum. To date, nearly $ 1 billion worth of BTC has been tokenized via Wrapped BTC alone.
As the revenue for Ether miners grows, new participants join the network to reap the benefits. The network’s hashrate has also risen steadily, surpassing its last all-time high on Oct.7, another fundamental bullish sign for Ether as it shows more participants are invested in the network.
Recent data also shows that new users have flocked to Ethereum. MetaMask, a popular Ethereum browser wallet widely used in DeFi, hit a whopping one million monthly users this month as the number of addresses holding ETH continues to rise, but can Ethereum handle the additional load placed on the network?
DeFi will create or destroy Ethereum
DeFi is creating traction for Ethereum and has helped bring a significant number of miners back to the network, but it’s also worth noting that the fees have reached unsustainable levels due to network congestion.
As users compete for their transaction processing, higher fees have to be paid. On September 2, a standard transaction on Ethereum cost an average of $ 15, according to data from Blockchair.
While this is good for short-term miners, it could completely discourage casual users from using DeFi as smart contracts become too expensive to use. Indeed, this very problem could be one of the main reasons for the sharp correction observed in DeFi token prices over the past month.
While second tier solutions are gaining traction, most people simply don’t use them. Other more permanent solutions like the upcoming Ethereum 2.0. it also seems far from ready, which could lead to competitors like Binance’s smart chain taking part in the action or even completely overtaking Ethereum.
There are also analysts who believe the DeFi “craze” may have come to an end as its popularity has waned and regulatory intervention becomes imminent.
However, it is imperative that Ethereum quickly solve its scalability problem if it is to deal with DeFi and the possible growth of new trends such as non-fungible tokens.
