Ethereum miner fees dropped 65% over the past month as demand for decentralized finance (DeFi) products has dwindled.
According to data compiled by on-chain market intelligence startup Glassnode, Eethereum users paid $57.49 million in transaction fees in October, down more than 65% from September’s record-setting $166.39 million.
Alex Mashinsky, CEO of crypto lending firm Celsius, told CoinDesk that ETH fees were plummeting alongside demand for DeFi products:
Transaction costs declined as volumes on decentralized exchanges dropped, reducing demand for network’s bandwidth.
Per data by Dune Analytics, as reported by CoinDesk, trading volume on decentralized exchanges (DEXes) fell nearly 25% in October to $19.4 billion, registering the first monthly decline since April.
Maximum ether gas prices also fell from 5.18 million gwei to 0.6 million in October, according to data by Bitquery.
Denis Vinokourov, head of research at London-based prime brokerage Bequant told CoinDesk that the sharp drop suggested less aggressive bidding by users to execute transactions on Ethereum’s network.
The DeFi space exploded over the summer following the launch of Compound protocol’s COMP token and the resulting huge amount of interest in yield farming. Total fees leapt from $22 million in Q2 to $166 million in Q3 .
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