Ethereum (ETH) Transaction Fees Go Down
There have been incredible increases in Ethereum transaction fees due to DeFi ( decentralized finance ) projects that have grown and become popular last summer . This rise in line with the congestion of the Ethereum network and increasing demand has been on the decline in recent days. The main reason for this decline is that there is much less activity on the Ethereum blockchain compared to last summer.
According to data from metric site BitInfoCharts, the average price was $ 1,029 for an Ethereum transaction on Saturday, compared to $ 0.905 on Sunday. Considering the highs of up to $ 14,583 for a single trade at the beginning of September, it is seen that there was a very sharp decline.
The fees paid for Ethereum transactions are charged by Ethereum miners who spend computational power to process the transactions. When there is more demand for miners’ computing power than supply, naturally Ethereum transaction fees also increase.
When the network is strained under a wave of activity, many people process transactions at the same time, and miners prioritize transactions from the highest bidder. This amount constantly increases with more payments by users who demand their transactions as soon as possible. Fees also drop when the network is less busy or when there are enough miners to cope with the supply. The hash rate on the Ethereum blockchain has increased since July, but its rise has remained steady. Fees paid on the Ethereum blockchain vary instantly.
The decline in Ethereum transaction fees to unprecedented levels since July also shows the decline in demand for decentralized finance projects. Many DeFi projects have exploded in recent months, but their fall has also been drastic. For this reason, many investors suffered millions of dollars in losses.
According to the statement made by DeFi Pulse, $ 11 billion of cryptocurrencies have been locked into DeFi protocols by investors for now . This amount is expected to increase with new projects. However, since highly volatile price movements are observed, investors should be more careful in order not to face negative situations.