DeFi Hype Has Sent Ethereum Fees Soaring to 2-Year High: Coin Metrics

Ethereum fees are at a two-year high as the hype around decentralized finance (DeFi) leads to a surge in network activity, according to research firm Coin Metrics.

• Coin Metrics' data shows median transaction fees were just under $0.50 at press time – the highest since August 2018.
• Transaction fees increase alongside activity to avoid congestion in busy times.
• Ethereum's median gas price – a component of the transaction fees – has also reached levels not seen since early July 2018, according to Glassnode.
• Connor Abendschein, a research analyst at Digital Assets Data, said a "massive increase" in ERC-20-standard stablecoins had also contributed to a rise in gas prices.
• In a newsletter Tuesday, Coin Metrics analysts argued the spike in transaction fees came from increased network usage related to the DeFi hype around yield farming.
• Total value locked in DeFi projects recently passed the $3 billion mark, according to DeFi Pulse, having only crossed the billion-dollar milestone in February.
• Ether transferred via smart contracts – a telltale sign of a DeFi transaction – was up to a near all-time high of one million ETH ($242.5 million) a day, Coin Metrics said.
• The number of active ether addresses hit a two-year high a few weeks ago, but fell again as high fees pushed users off Ethereum, Coin Metrics said.
• Richard Rosenblum, a co-founder of digital assets firm GSR, told CoinDesk the gas price spike was part of a wider scalability problem for Ethereum.

See also: Nearly $60M in Bitcoin Moved to Ethereum in June