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The average transaction fee paid to transact on the Ethereum network has been steadily declining since mid-September, as interest in the decentralized finance ecosystem (DeFi) has stalled.
According to data from BitInfoCharts, the average transaction fee on Ethereum reached a new all-time high near $ 15 earlier this year in September, when interest in DeFi protocols was booming and total value frozen. in space it was approaching $ 10 billion.
After plunging shortly thereafter and hitting a new high of $ 11.6 in mid-September, the average transaction fee paid on Ethereum plummeted to the point where the average transaction fee is now below $ 1.
Transaction fees on Ethereum increase as there is limited space for transactions in the blocks found by miners, and if demand exceeds the available space, users start bidding higher on gas rates to see which transactions are included in the next block.
Total value locked in DeFi has notably started growing at a slower pace since then, hitting an all-time high of $ 12 billion earlier this month before plummeting after DeFi Harvest Finance protocol was leveraged on $ 24 million cryptocurrency.
The total value locked in ETH, according to DeFi Pulse, reached 9.4 million ETH in mid-September and only surpassed that figure on October 19, at 9 million ETH. It has since dropped to 8.88 million ETH. The total amount of BTC blocked on DeFi protocols, on the other hand, has steadily increased, rising from 100,000 BTC in mid-September to 161,000 BTC at press time.
Interest in decentralized space has likely slowed as some of the major total value locked protocols have begun to reduce governance token rewards for yield farmers and as centralized trading platforms compete with decentralized protocols on the yields they offer.
It’s also worth noting that the average transaction fee paid to transact on the Bitcoin network increased this week after the flagship cryptocurrency’s price hit $ 13,000.
Featured image via Pixabay.
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