The growing popularity of decentralized financing (DeFi) has led to new interest and optimism in the cryptocurrency sector: The total value of all protocols has increased from $ 1 billion to $ 59 billion in less than a year, with 5 major platforms counting for a dollar. 24.33 billion of the total value.
The increase in gas charges has been one of the most visible results of increased interoperability with DeFi protocols, and Ethereum Network (ETH) currently hosts most of Defi’s flagship projects. Gasoline taxes have risen steadily since November 2020 and culminated on February 23, when the average contract value reached 373 atmospheres, which is about $ 11.72 at today’s Ether price.
Since February 23, commissions have decreased by 65%, with the average cost falling to 131 Gwei on March 3, and data show that commissions are below 70 Gwei at certain times of the day.
The DeFi business is declining with market corrections
A potential source of the fall in petrol prices over the last two days can be found by looking at the daily volume of the Decentral Exchange (DEX).
Dune Analytics data shows that DEX’s trading volume has fallen since peaking at $ 4.35 billion on February 23, while the 24-hour DEX growth rate fell 50% on March 3.
The fees have gone down in recent days, according to Connor Higgins, a computer scientist at Flipside Crypto, but instead of linking this to a specific reason, Higgins said the higher fees seen on February 23 were different from the total. … on average over a longer period of time.
“On average, fees have actually decreased, but it seems to be returning to normal after a day of unusually high fees.”
As you can see in the chart above, the gas charges were much higher than the average between 22 and 23 February, when the congestion in the network increased due to sales on the market, led to BTC falling 23.6%, and altcoin prices were also heavily corrected. . After the market stabilized, petrol prices returned to their normal level.
The growth in the number of NFT transactions closed the Ethereum network
Those using the Ethereum network could have expected more extensive petrol price reductions as DeFi transactions fell, but this did not happen. One reason why prices continue to rise may be the recent increase in activity in the non-financial tokens (NFT) sector.
As more and more NFT projects start and auctions take place, high transaction costs and network load are likely to continue on the Ethereum network until a comprehensive integrated expansion solution is implemented.
Layer 2 bridge solutions and Ethereum protocols such as Polygon and Binance Smart Chain have emerged in the last two months, and several projects have moved to these platforms as the best short-term solution for high fees.
Projects such as Aavegotchi and SushiSwap have shown how efficient these networks are after the recent integration with Polygon, and NFT and DeFi projects are likely to follow because transaction costs and speeds are higher than Ethereum.