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- Ethereum fees soared 270% between February 5th and 9th.
- ETH is up over 9% in USD terms over the past week.
The blockchain ecosystem has seen rapid growth in recent years, with several new projects emerging and existing projects evolving.
However, amidst all these developments, Ethereum (ETH)’s status as the leading revenue-generating protocol has not been threatened.
According to AMBCrypto’s research into cryptocurrency fee data, the smart contract network collected $8.6 million in fees in the last 24 hours, which is significantly higher than any other project on the list.
To give a sense of Ethereum’s dominance, Uniswap (UNI), the second largest decentralized exchange (DEX), took only $2 million in fees, which is a quarter of Ethereum’s total.
Moreover, Ethereum’s tally was 5.5 times greater than that of Bitcoin (BTC), the first blockchain.
Ethereum’s daily fees have skyrocketed over the past week, jumping 270% between February 5th and 9th.
Source: Cryptocurrency Fees
What caused the rapid rise?
AMBCrypto examined Ethereum’s network activity over the past week to determine the cause of the fee surge.
The number of blockchain transactions remained stagnant without any significant increase. However, transfer volume, or the total value of ETH moving on-chain, has increased by 159% in the past week.
This proves that high-value transactions have recently increased.
Source: Santiment
However, it is important to note that the average fee for a transaction is not related to the size of ETH transferred. Therefore, another plausible reason for the fee increase could be the rising market value of ETH.
Using CoinMarketCap data, AMBCrypto points out that ETH is up more than 9% in USD terms over the past week. This likely supplemented the network’s total revenue.
ETH burn rate increases
As we know, a certain amount of ETH is burned for each transaction. This corresponds to the minimum amount required for a transaction to be considered valid, i.e. the base fee.
Is your portfolio green? Check out our ETH Profit Calculator
Last week, as Ethereum’s base fee soared, ETH surged and was pushed out of circulation.
Deflationary pressures can have a positive impact on the long-term economic dynamics of the network.
Source: Glassnode