Monthly Ethereum Transaction Volumes Hit $24 Billion Despite Huge Fees

In August, skyrocketing transaction fees on Ethereum have caused a drastic decline in user activity but have not affected its decentralized finance (DeFi) ecosystem yet, according to decentralized applications tracker DappRadar.

Per DappRadar’s August report published today, the total monthly transaction volume on Ethereum amounted to over $24 billion in August. However, the blockchain is showing “contradictory results” due to the extremely high prices of Gas—units used to measure transaction fees.

Every miner has his day

As Decrypt reported yesterday, Ethereum miners have set a new record by reaching the total average revenue from transaction fees of $800,000 per hour. All the while concerns about potential unsustainability of the network—if fees continue to increase at such a rate—are growing among the community.

“High Ethereum gas prices decreased the number of active wallets drastically in almost all categories,” DappRadar’s researchers noted, adding that, “A transaction currently costs more than $50.”

As a result, the number of daily active Ethereum wallets reportedly decreased by 6% on average in August. Gambling and high-risk applications were hit the hardest, losing over half of their active monthly users, dropping from 6,700 to 2,393 active wallets. The activity in various Ethereum games and marketplaces also shrunk by 33%—from 1,500 to 1,000 daily active wallets.

But it hasn’t slowed down the growth of DeFi and decentralized exchanges (DEXs).

“On the other hand, on average DeFi and DEX active wallets grew by 16% month-on-month. The biggest contributor was Uniswap V2, where daily active wallets grew from around 10,000 to more than 14,000,” the report noted.

DeFi to the rescue

The data shows that DeFi and DEXs have become the saving grace of Ethereum lately, continuing to grow steadily despite surging Gas prices. “The madness surrounding the DeFi ecosystem seems to be increasing all the main metrics,” the researchers added.

Simultaneously, the total dollar value locked on DeFi platforms reached $7.5 billion by the end of August and currently amounts to over $8 billion, according to Dappradar. However, almost half of this growth in August was due to “DeFi token price bubble,” it explained.

“First of all, growth is partly driven by the increase in the token price. $1.5 billion or 42% of the growth is generated by the DeFi token price bubble,” the report stated, adding that “The rest of the increase was driven by increased interest in lending and liquidity protocols such as Aave, Uniswap, and Curve. Recently protocols surpassed the $1 billion line in total value locked.”

Crypto analytics platform Glassnode also noted that DeFi is demonstrating rapid growth this year.

“The surge of internal Ethereum contract calls is even more striking. The number of internal transactions in the network has grown from less than 1M in June to currently over 3M million per day – an increase of more than 3x in just three months,” Glassnode tweeted today.

All this data suggests that the exponential growth of “DeFi bubble” is currently capable of counteracting all the negatives caused by skyrocketing fees—but how long can it last?