While Ethereum through DeFi is overflowing with numerous projects; In the largest altcoin, the utilization rate of the blockchain is discussed all year round. While the asset’s Ethereum 2.0 developments are being shelved for now and somewhat put in the background The Ethereum blockchain has recently witnessed high levels of congestion leading to extremely high transaction prices.
Now, according to Glassnode data; The number of contract calls initiated by Non-Ethereum Accounts (EOAs) in Ethereum nearly tripled in 2020. This rate increased from 300,000 to 850,000 per day at the time of writing.
EOAs are now defined as accounts that are controlled by private keys and do not have the code associated with the blockchain. A higher percentage of users are usually EOA accounts.
The surprising new data shows that only 34.2% of the proposed network transactions are used for the transfer, with ETH only 10.7% of the total fees. These statistics are clearly indicative of high retention rates, not ether transfers among users. In 2020, EOAs in transactions became the main use case for Ethereum.
This is where DeFi’s involvement seemingly got out of control.
It has also been suggested that the number of internal transactions on the network has now increased from 1 million to 3 million in June. Now internal contract calls mean that transactions are on the chain, but it is possible that these transactions are only related to transaction prices for DeFi and latest yield farming practices.
Will such applications affect the value and functionality of Ether in the long run?
Probably not in terms of functionality, as ETH is required for all primary transactions. But when it comes to value, a completely different point comes into play. In fact, Ethereum saw high prices throughout August, but at the time of writing, the value of ETH fell by $ 100 in a 72-hour period.
At the beginning of 2020, it was found that about 52.4 percent of the wages were used in “other contracts”. These “other contracts” do not use the ERC20 or ERC721 standards, that is, ether was barely used here for any use case and it was before DeFi was hosted.
At this rate, the value of Ether may continue to decline, even if met with an occasional price increase. The value and use of Ethereum in general is not hurting, but the primary token ETH is currently facing a power struggle with all other projects rising on the main Ethereum blockchain.