The ongoing DeFi craze has propelled Ethereum into the record books after setting a new All-Time High on Sept. 17. with a historical figure for its number of daily transactions.
The Ethereum network has been experiencing increased congestion recently, which might have hinted to a slow down on transaction numbers.
However, this has not been the case with Etherscan recording a total number of 1,406,000 transactions on the Ethereum network. Etherscan is a blockchain explorer, search, API and analytics platform for Ethereum.
This amount of transactions in a single day is the highest that has ever been recorded on the Ethereum network. The volume surpassed the Jan. 4 2018 transaction amount of 1,350,000, which has held the top rank in the network since.
DeFi applications growth surge
The new record for amount of transactions has happened in the middle of an ongoing DeFi applications (decentralised finance) boom. DeFi are applications that encourage a shift from traditional centralised financial systems to peer-to-peer systems that are supported by decentralised technologies.
These DeFi apps use smart contracts or automated enforceable agreements that are fast, safe and do not need intermediaries. The DeFi sector has been growing rapidly, especially on the Ethereum blockchain with their total value hitting $9 billion in August 2020 .
This explosive growth has drawn even more people in the blockchain space to jump on the technology, which emphasizes an open-source access to financial tools, low barriers to entry services and distributed teams.
Ethereum Gas Fees skyrocketing
The unprecedented growth of the DeFi industry, has prompted several exchanges such as Binance and OKEx to join in the hype by listing different DeFi tokens. As a result, the Ethereum network, where most of these tokens are built on, has experienced a lot of congestion as well as scalability issues. Consequently, the Ethereum gas fees have increased dramatically benefiting many miners in the process. For instance, on Sept. 1, miners in this network earned a record $500,000 in fees in a single hour.
On the night of Sept. 16, Uniswap launched their governance token, UNI, which received a lot of hype and flooded the Ethereum platform as past users rushed to claim their tokens. Uniswap is a decentralized protocol built on the Ethereum protocol which provides automated liquidity.
Following UNI’s launch, Ethereum’s transaction fees spiked to almost $1 million an hour on Sept. 18. The huge increase in gas fees on the platform had negative effects on traders, as exchanges such as Coinbase required its customers to pay for both gas and withdrawal fees.