Ethereum has seen a decentralized finance craze over recent weeks.<\/p>\n
Due to innovation, high returns on investments, and other attractive characteristics, DeFi has gone parabolic.<\/p>\n
Data from DeFiPulse<\/a> shows that the value of cryptocurrency locked in blockchain finance applications has reached $1.6 billion. This is<\/p>\n Simultaneously, DeFi-related tokens like Compound’s COMP and Balancer’s BAL have rocketed in value. There was a point earlier this week when COMP was up 1,000% from last week’s launch price of ~$30.<\/p>\n But this craze has come at a cost: high Ethereum transaction fees. Really high transaction fees.<\/p>\n And this cost is starting to get on some users’ nerves.<\/p>\n The DeFi craze has had quite an effect on Ethereum’s usage and adoption.<\/p>\n As reported by NewsBTC<\/a>, blockchain analytics firm Santiment has found that Ethereum’s network growth is reaching yearly highs. The firm specifically cited the number of new BTC addresses being created, which “just crossed above 100,000 again yesterday.”<\/p>\n \u201cEthereum\u2019s network growth metric has rapidly been on the rise since the beginning of 2020, creating 237% more addresses yesterday than it did on Jan 1, 2020 (and ~+200% accounting for rolling averages now vs. then).\u201d<\/p><\/blockquote>\n This strong on-chain usage has coincided with a spike in fees.<\/p>\n EthGasStation reported on Wednesday that the cost of gas on Ethereum reached ~50 Gwei.<\/p>\n That coincides with around $0.25 for a simple transfer of ETH. Though at 50 Gwei, it costs though dozens of dollars for interactions with smart contracts.<\/p>\n As Head of Business Development at Kraken’s futures division wrote<\/a> on the fees:<\/p>\n “I have spent $14 on ETH gas fees to transfer\/lock my $15 into @CurveFinance and I’m earning a princely $0.079 in weekly $SNX rewards. I’ll break even in just 177 short weeks! (not including gas to close contracts.”<\/p><\/blockquote>\n My yield farming is off to a great start. <\/p>\n I have spent $14 on ETH gas fees to transfer\/lock my $15 into @CurveFinance<\/a> and I'm earning a princely $0.079 in weekly $SNX<\/a> rewards. <\/p>\n I'll break even in just 177 short weeks! (not including gas to close contracts) \ud83d\ude80\ud83c\udf15<\/p>\n — Kevin Beardsley (@kevinhbeardsley) June 25, 2020<\/a><\/p><\/blockquote>\nRelated Reading: These 4 Signs Show Bitcoin Is Likely to See a \u201cBig\u201d Move Down: Analyst<\/a><\/h6>\n
Ethereum Fees Spike on DeFi Craze<\/strong><\/h2>\n
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