{"id":172316,"date":"2020-09-20T21:09:04","date_gmt":"2020-09-20T20:09:04","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=172316"},"modified":"2020-09-20T21:09:04","modified_gmt":"2020-09-20T20:09:04","slug":"ethereum-network-congestion-rockets-as-eth-supply-moves-into-smart-contracts","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/ethereum-network-congestion-rockets-as-eth-supply-moves-into-smart-contracts\/","title":{"rendered":"Ethereum network congestion rockets as ETH supply moves into smart contracts"},"content":{"rendered":"<p>The Ethereum network has been placed under immense pressure to handle significant demand for its blockspace, with users interacting with smart contracts, DEXs, and AMMs directing massive transactional volume to the network.<\/p>\n<p>This has resulted in high fees \u2013 the likes of which have never been seen before. These high fees have driven investors\u2019 capital towards other layer ones, with debates mounting regarding which \u201cEthereum killer\u201d may capture a sizeable share of the market.<\/p>\n<p>One interesting trend that the DeFi crazed has created for Ethereum \u2013 in addition to sky-high fees \u2013 is a migration of <a href=\"https:\/\/cryptoslate.com\/blockchain\/ethereum\/\">ETH tokens<\/a> away from centralized exchanges and into smart contracts.<\/p>\n<p>Data reveals that there is now more ETH held within smart contracts than there is on centralized exchanges.<\/p>\n<p>This could bode well for Ethereum\u2019s price, as it makes these tokens less readily available for trading, which could, in turn, provide some stability.<\/p>\n<h2><strong>Ethereum network congestion reaches new heights as DeFi trend persists<\/strong><\/h2>\n<p>The DeFi ecosystem is nearly exclusively built upon Ethereum and drives demand to the blockchain through multiple different facets.<\/p>\n<p>Users looking to acquire tokens use AMMs and DEXs to do so, with each conversion requiring both an approval and an actual swap. This alone has placed some strain on Ethereum.<\/p>\n<p>The yield farming trend has compounded this, as investors lock their tokens within smart contracts and liquidity pools to generate returns on their capital.<\/p>\n<p>Analytics platform <a href=\"https:\/\/cryptoslate.com\/companies\/santiment\/\">Santiment<\/a> explained in <a href=\"https:\/\/twitter.com\/santimentfeed\/status\/1307022143725723648\">a recent tweet<\/a> that the current congestion that the Ethereum network is facing is the highest ever seen.<\/p>\n<blockquote><p>\u201cETH gas fees have notably skyrocketed the past couple months as DeFi solutions and \u2018yield farming' platforms have extensively risen in popularity. The Ethereum network has NEVER faced a congestion hitch quite this drastic before.\u201d<\/p><\/blockquote>\n<p>During peak activity times on the platform, users often have to pay north of $60 worth of gas to have their transactions processed promptly.<\/p>\n<h2><strong>ETH supply largely shifts away from centralized exchanges and towards smart contracts<\/strong><\/h2>\n<p>High fees and network congestion aren\u2019t the only impacts that DeFi has had on Ethereum.<\/p>\n<p>Data also shows that the amount of ETH being held on centralized exchanges has seen a drastic decline in recent times, with most of it being shifted into smart contracts.<\/p>\n<p><a href=\"https:\/\/cryptoslate.com\/companies\/glassnode\/\">Glassnode<\/a>, an analytics firm focused on on-chain data, recently <a href=\"https:\/\/twitter.com\/glassnode\/status\/1306979575327584262\">put forth a chart<\/a> showing that nearly 16 percent of the Ethereum supply is now held within smart contracts, whereas 11.5 percent is held on centralized exchanges.<\/p>\n<figure id=\"attachment_172317\" aria-describedby=\"caption-attachment-172317\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-172317\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/09\/Glassnode-1024x573.jpg\" alt=\"Ethereum\" width=\"1024\" height=\"573\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/09\/Glassnode-1024x573.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/09\/Glassnode-300x168.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/09\/Glassnode-768x429.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/09\/Glassnode.jpg 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-172317\" class=\"wp-caption-text\">Data Source: Glassnode<\/figcaption><\/figure>\n<p>This trend suggests that high transaction fees may not go away anytime soon. Still, it also indicates that the cryptocurrency's price could be well-positioned to see heightened stability in the weeks and months ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ethereum network has been placed under immense pressure to handle significant demand for its blockspace, with users interacting with smart contracts, DEXs, and AMMs directing massive transactional volume to the network. This has resulted in high fees \u2013 the likes of which have never been seen before. These high fees have driven investors\u2019 capital [&hellip;]<\/p>\n","protected":false},"author":174,"featured_media":140568,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120,46940],"tags":[60923],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ethereum network congestion rockets as ETH supply moves into smart contracts<\/title>\n<meta name=\"description\" content=\"Data reveals that there is now more Ethereum held within smart contracts than there is on centralized exchanges.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/ethereum-network-congestion-rockets-as-eth-supply-moves-into-smart-contracts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ethereum network congestion rockets as ETH supply moves into smart contracts\" \/>\n<meta property=\"og:description\" content=\"Data reveals that there is now more Ethereum held within smart contracts than there is on centralized exchanges.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/ethereum-network-congestion-rockets-as-eth-supply-moves-into-smart-contracts\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2020-09-20T20:09:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/ethereum-road.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Cole Petersen\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Cole Petersen\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/ethereum-network-congestion-rockets-as-eth-supply-moves-into-smart-contracts\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/ethereum-network-congestion-rockets-as-eth-supply-moves-into-smart-contracts\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/#person\",\"name\":\"Cole Petersen\",\"url\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/11\/author-cole-petersen.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/11\/author-cole-petersen.jpg\",\"caption\":\"Cole Petersen\"},\"jobTitle\":\"Journalist\",\"description\":\"Cole is a freelance journalist and university student studying philosophy. 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