![]() ![]() With all the hype in the DeFi space right now, DeFi applications (specifically decentralized exchanges, or DEXs) are taking up the majority of the gas fees used by the "other contracts" category. ![]() If we break down this "other contracts" category further, we start to see some interesting patterns. However, this is dwarfed by the "other contracts" category (which looks at fees spent on transactions other than for ETH, ERC-20, and stablecoin transfers), which accounts for over 65% of all gas spent this month. Figure 3 - The distribution of fees on Ethereum for August 2020 across several categories USDT is clearly dominating the stablecoin market on Ethereum, with other stablecoins only accounting for 1.2% of fees spent. The growing dominance of USDT is a large factor in taking up network space, with transfers of this token accounting for 14% of all fees spent in August so far. But where is this demand coming from? Stablecoins (especially USDT) It's alt season, and users are scrambling to allocate capital into the tokens and protocols that they expect to generate the most yield. ![]() So why are fees so high? Simply put, fees are skyrocketing due to massive demand for transactions on Ethereum. Etherscan is currently recommending an average gas price of over 350 Gwei for a 20 second wait time. However, in order to use the network effectively, users will need to pay far more than the median gas spent. Figure 2 - Ethereum's median gas price has reached an all-time high ( Glassnode Studio) The mean gas price is even higher, at 224 Gwei. This spike in fees has been caused by a high demand for space on-chain, with the median gas price reaching an all-time high of 217 Gwei. Figure 1 - Over 17,500 ETH are currently being spent on fees daily on Ethereum ( Glassnode Studio) Over 17,500 ETH (USD$6.8 million) are currently being spent on fees daily on Ethereum. The amount of fees being spent on the Ethereum network is higher than ever before (now even higher than the single day in June with anomalous fees unrelated to regular network usage). ![]()
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