The DeFi craze, which has recently shaken the cryptocurrency market, has increased Ethereum (ETH) transaction fees. Investors turning to ETH-based Maker (MKR), Aave (LEND), Curve Finance (CRV), Synthetix (SNX) and Compound (COMP) projects caused transaction fees in the Ethereum network to rise.
Maker, Aave, Curve Finance, Synthetix and Compound DeFi projects, which make huge profits to their investors in a short time, use the Ethereum network. Increased interest in these five Ethereum-based DeFi projects caused transaction fees in the ETH network to soar. As the transaction activity of DeFi’s increases, transaction fees in the ETH network also increase. While the total amount of money in DeFi projects has exceeded $ 6 billion, $ 5 billion of this is from Maker, Aave, Curve Finance, Synthetix and Compound.
He Broke His Own Record
The average transaction fee on the Ethereum network was recorded as $ 4.55 million in 2018, the highest. Last week, on August 12, the total daily transaction fee on the Ethereum network reached $ 6.87 million, breaking its two-year record. Just one day later, the total daily transaction fee on the ETH network reached $ 8.61 million, replenishing its own record.
DeFi Projects May Attract Whales
Unable to afford increasing transaction fees, individual ETH investors may leave DeFi projects to whales. According to the report of Coinmetrics; The density that investors experience in the Ethereum network causes delays in transactions. The investor, who does not want to experience delays in the Ethereum network, pays more transaction fees to prioritize miners’ transactions. Therefore, transaction fees on the network are increasing.
Although increasing transaction fees make miners earn more, it causes investors who want to make transactions to pay more money. As the average transaction fee in the Ethereum network increases, the usage costs of the applications, games and digital collections offered to the users over the network increase. If individual users cannot compete with whales in paying the increased transaction fee, they may distance themselves from DeFi projects.