Ethereum just created a new all time high price record of $ 1539 on 3rd Feb ’21. However, that wasn’t the only achievement from the camp of the largest smart contracts platform in the world, which has been flooded with new achievements and records lately. According to crypto-analytics group glassnode, Ethereum protocol generated a whooping $325 million in Jan ’21. This makes Ethereum the record holder for most fees generated by a protocol in the cryptocurrency and blockchain field!
A staggering $325 million in transaction fees were paid on #Ethereum in January, almost doubling the amount of its previous record month (Sept 2020).
In comparison: #Bitcoin January fees were $114 million (2.8x difference).
Chart: https://t.co/ZW4uaQeoiq pic.twitter.com/Jszc5LOz9N
Previously, the record was held by Bitcoin, which generated $287 million back in Dec ’17. Ethereum’s previous record was $166 million for Sep ’20. It can be attributed to the increase of activity on the network and astronomical rise in demand for the Ethereum block-space, mainly coming from DeFi protocols. The protocol also has an upper hand in transactions processed and value moved metrics vs Bitcoin.
But, there’s a second side of the picture too. Ethereum network has become congested, causing the transaction fees to skyrocket and waiting times to increase. Though, it’s still cheaper to transact (for single transfers) on Ethereum than Bitcoin, complex contract executions can go much higher.
Fortunately, Ethereum based Layer-2 solutions are coming up online fast and steadily gaining adoption, it’s expected that with the migration of network traffic onto L2 and incoming Eth2 upgrade, the base layer scaling problems would be over in the near-future.
Ethereum has overtaken Bitcoin sustainably for quite some time now and generates 2X-4X more fees on any given day. This indicates higher user interest, block-space demand and thus more usage. It’s also worth noting that this list is populated almost exclusively by Ethereum based DeFi protocols, which dominate in the top ten valuable protocols.