Ethereum remains by far the largest smart contracts platform by market cap. Perched at second in the market cap leaderboard, the network hosts dapps cutting across multiple sectors.

While the Metaverse, gaming, and NFT activities have since dissipated, DeFi stands, looking at the steady recovery in total value locked (TVL), according to DeFiLlama.

DeFi Leads In Ethereum Gas Fees Generation

The dominance of DeFi in Ethereum goes on to show smart contracts and decentralized ledgers have revolutionized finance. To confirm this position, especially looking at trends in gas fees and the primary source over the years, the managing partner of DragonFly, took to X, sharing data from CoinShares.

After launching in Ethereum, CoinShares analysts note that gas fees continue to grow. There was a notable dip after the ICO mania of 2017 and 2018. The annual gas fees generated tanked from $143 million in 2018 to as low as $46 million in 2019.

However, after this contraction, which came after the crypto winter of 2018, gas fees generated exploded. The pickup in momentum coincided with the popularity of ERC-20 tokens, permitting protocols to issue tokens and the rising adoption of DeFi.

The resurgence in DeFi follows the launch of Uniswap, a decentralized exchange (DEX), in late 2018 and the introduction of the automated market maker (AMM) model, which decentralized liquidity provision. DEXs form a big part of DeFi. Some of the most popular DeFi protocols, looking at DeFiLlama, are DEXs like Curve and Uniswap.

From 2018 to 2020, the network derived its fees from ERC-20 transfers. However, as DeFi picked up steam on Ethereum in the last bull cycle from 2021, most gas fees have been from DEXs.

DEX Gas Fees Fall As ERC-20 And Stablecoin Transfers Grow, Blame Dencun?

Interestingly, gas fees from DEXs continue to fall, dropping from $2.4 billion in 2021 to $512 billion as of 2024. Meanwhile, as of September 2024, ERC-20 transfers are in second place, up from third, where it has been from 2021 to 2023. Last year alone, ERC-20 transfers, a decent portion from meme coins like PEPE and stablecoins, generated $223 million for validators.

Additionally, gas fees from layer-2s continue to slump, according to data. In 2023, Ethereum generated $247 million in fees from layer-2 platforms like Arbitrum and Optimism. According to CoinShares, it was at $90 million by the time of their publishing. The sharp drop is primarily due to the activation of Dencun.

Feature image from Canva, chart from TradingView

Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part – in fact, far from it.

Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.

When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.

Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books – ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.

Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.

Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time – he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.

Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon – cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment – spreading the crypto gospel to the rest of the world.

On-chain data shows that Ethereum transaction fees have been rising again recently. Here’s what could be behind this trend.

Ethereum Average Fees Has Registered A Notable Uptick Recently

In a new insight post, the on-chain analytics firm Santiment talked about how the Ethereum network has recently become more expensive. The metric of interest here is the “Average Fees,” which keeps track of the average fees that ETH users are currently attaching with their transfers.

How much fees senders might be willing to pay comes down to the activity level the blockchain is witnessing. In times of high traffic, transfers can get stuck for a while, as ETH has only a limited capacity to handle transactions. Those looking to beat the crowd, thus, go with a higher-than-average fee.

This user competition is what governs how high the average would get. With little activity on the network, senders will go for the cheapest amount possible, as there isn’t much incentive to pay a high fee.

Now, here is a chart that shows the trend in the Ethereum Average Fees over the last few months:

Looks like the value of the metric has been heading up in recent days | Source: Santiment

As is visible above, the Ethereum Average Fee has been climbing recently and currently sits at $3.2, the highest level since early August. However, this previous spike in August, although great in scale, had lasted very briefly.

From the chart, it’s visible that this previous spike had coincided with the crash that the cryptocurrency had observed around then. Thus, the fee surge was because the investors had been making panic moves and were willing to pay high to get them done fast.

Before this spike, the last time a sustained trend in fees similar to the recent one had been observed was in late May. As such, the latest value of the metric has effectively been the highest point in four months.

Now, as for what’s behind this latest trend, an obvious reason would seem like the rally the asset has recently enjoyed. Sharp price action attracts attention, so the Average Fees generally go up.

However, details of the fee breakdown reveal that the normal Ethereum traders may not drive the increase.

The distribution of the ETH fees over the past week | Source: Santiment

As it turns out, Wrapped Ethereum (WETH) has recently been the token providing the largest contribution to network fees. As Santiment notes:

The dominance of WETH in fee contributions indicates that traders are heavily utilizing DeFi platforms, likely engaging in liquidity pools, trading, and other financial activities that require WETH as a base asset.

ETH Price

At the time of writing, Ethereum is floating around $2,700, up 5% over the last seven days.

The price of the coin seems to have been consolidating over the last few days | Source: ETHUSDT on TradingView

Featured image from Dall-E, Santiment.net, chart from TradingView.com