Ethereum Experienced Logging On its Busiest Week on Record
Recently, it costs more to use Ethereum (ETH) because more users are flocking to the platform compared to before. According to some analysts, the rise in stablecoin usage and the DeFi application fueled the growth of transactions and cost to process it.
Then, the seven-day moving average of the overall amount of ‘gas’ used in transactions on Ethereum’s blockchain boosted to a record high of 61.12 billion on Monday. With that, it exceeded the previous high of 60.07 billion reached last September 2019, based on the data from blockchain analytics firm CoinMetrics.
In addition to that, gas is a token that powers the blockchain of Ethereum. And they use the unit to calculate the amount of fees a user needs to pay to carry smart contract data or payments on the said blockchain. Also, ether is a reward given to miners and is equal to the amount of gas needed to make a transaction.
Data provider Messari’s research analyst, Wilson Withiam, stated, “The increase in gas usage indicates a continuous growth in the use of Ethereum’s platform, as measured via gas per transaction.”
Currently, the transaction count of Ethereum hit a 27-month high of 938,265. And it went up to almost 45% from lows seen in January as of Monday.
Tether and DeFi Fuel
Three Arrows Capital co-founder and chairman Kyle Davies said that both Tether and Decentralized Finance (DeFi) on Ethereum had shown phenomenal growth. And Ethereum gas usage has surged to an all-time high.
Moreover, the use of the U.S. dollar-backed stablecoin Tether (USDT) on Ethereum has skyrocketed massively this year.
According to CoinMetrics, the number of daily USDT transactions on Ethereum have increased by as much as 450%. And this is on a year-to-date basis.
Since November 2017, Tether was issued on Ethereum. Now, the platform holds 65% of Tether’s total supply.
Arcane Research’s research analyst Bendik Norheim told CoinDesk, “Almost $6 billion of USDT’s total supply is now on Ethereum.”
This is higher from $1.5 billion at the beginning of 2020.
Furthermore, Tether has ten times more transactions on Ethereum compared to all other ERC-20 tokens. On the other hand, based on Ether Gas Station, Tether transactions have paid more than $2.5 million worth of fees on Ethereum in the past 30 days. As a result, it made USDT the largest gas payer on Ethereum.
Aside from Gas
Generally, Tether and stablecoins have witnessed massive growth this year during the coronavirus-induced volatility in traditional markets. Apart from that, the overall supply of all stablecoins has surpassed the $11 billion mark this week. With that, it doubled its value since February, based on the Messari data.
Nevertheless, the boost in gas usage is not wholly because of Tether. Ethereum-based Decentralized Exchanges (DEXs) like Kyber, Uniswap, and IDEX have experienced solid growth in transaction volumes for this year.
For the first five months of the year, Kyber Network registered $609 million in transaction volume. And that is 1.5 times more than the volume of $388 million showed in 2019, as per the official blog.
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