$6.8 Million is Being Spent on Ethereum Fees Each Day as DeFi Craze Continues

The DeFi craze is reaching new peaks, with investors now throwing money into just about every Ethereum-based token with unique properties and strong “meme potential.”

One such example of this is Yam Finance, which is a protocol launched roughly 48 hours ago that drew in hundreds of millions of dollars before a fatal bug left a small portion of these funds locked within the platform.

The rise and fall of Yam Finance sent shockwaves throughout the entire crypto market, with it causing many popular DeFi tokens – like Compound – to see heightened volatility due to traders trying to farm massive yields on the platform.

One byproduct of this craze has been rising Ethereum transaction fees.

The amount of money that investors are spending to transact between ERC-20 tokens is currently the highest it has been, with a total of $6.8 million being spent on fees daily.

DeFi Craze Gains Traction as Fiscal Incentives Grow

Throughout the past few months, investors have been captivated by the massive returns that tokens related to the DeFi sector have provided.

Users can profit from the trend in two ways – either by purchasing the tokens associated with various protocols within the ecosystem or by “farming” the yields offered by many platforms.

To take advantage of either of these opportunities, investors use Ethereum or ERC-20 tokens.

This is widely thought to be one of the primary factors behind the influx of buying pressure that sent ETH’s price surging from $230 just over a month ago to highs of $415.

Ethereum Fees Rocket as Demand for Space On-Chain Mounts 

According to a recent report from the analytics platform Glassnode, users are now spending a total of 17,500 ETH per day on fees. This is worth a combined total of 6.8 million – the highest it has ever been in the cryptocurrency’s history.

“The amount of fees being spent on the Ethereum network is higher than ever before (now even higher than the single day in June with anomalous fees unrelated to regular network usage). Over 17,500 ETH (USD $6.8 million) are currently being spent on fees daily on Ethereum.”

Image Courtesy of Glassnode.

The median gas price used per transaction has also reached new highs of 217 Gwei – signaling that Ethereum users have to compete heavily to have their transactions processed.

It is highly likely that this trend will continue gaining steam as users try to cash in on the DeFi sector’s explosive growth.

Featured image from Unsplash.