The price of Ethereum not only has hit a record high of $1,700 in recent days, but the cost of using the network skyrocketed as well. Per Blockchain, the average transaction fee is now $20.63.
Ethereum last broke its transaction fee record a month ago on Jan. 11, hitting an average $19 per transaction. The increase correlates with the general price run Ether has enjoyed since the New Year.
Ethereum miners have been a primary beneficiary of the fee spike. The industry earned some $830 million in Ether last month with 40% attributed from fees alone.
In terms of ETH, it still has a long way to go as it currently costs 0.0124 ETH, while the ATH was 0.032 ETH during the DeFi mania last September.
Average gas prices are also surging to 205.8 Gwei. However, that is nowhere near July 2020 levels that reached 700 Gwei. The all-time high is 800 Gwei, which was last seen in December 2016.
Popular DEX Uniswap has paid $34.5 million in gas fees over the last 30 days, becoming unusable for smaller participants. Uniswap is managing more than $1 billion in daily volume during the ongoing bull market. While competitor Sushiswap is doing half of it.
Meanwhile, the biggest U.S. exchange Coinbase only did just over 4x of Uniswap’s volume, which could see a $50-$100 billion valuation for its direct listing.
The increase in the cost of transacting on the Ethereum network also reflects growing demand for ERC-20 based tokens, particularly stablecoins and the red-hot decentralized finance (DeFi) sector.
DeFi Tokens Pushing Ethereum Fees Higher
The high cost to interact with the Ethereum network is to be expected as not just the price of Ether, but DeFi tokens have also been enjoying the bullish onslaught as well. DeFi’s total market capitalization has soared in the past 24 hours, led by UMA (165%), SWRV (43%), AAVE (36%), WNXM (29%), BADGER (25%), COMP (20%), and SUSHI (13%).
This has pushed the market cap of DeFi coins past $60 billion. Total value locked in DeFi space has been hitting new highs every day lately, currently at almost $32.5 billion.