The network previously enjoyed significant bullish momentum and surging transaction fees during the DeFi fever. However, as DeFi volume declined to normal levels, the network’s transaction fees and subsequently the miners’ earning saw a marked drop.
Ethereum miners’ earnings drop by $107M in October
According to data by BitInfoCharts, the average transaction fee percentage in total block reward declined by nearly 20 between 15 September and 15 October. The median fee percentage declined to 27.45 in October from 47.28 percent in September.
Meanwhile, transaction fee revenues declined by over $107 million in October 2020. The total fee revenue dropped from $166 in September to below $60 million in October, according to Glassnode statistics.
DeFi activity slumped
Transaction fees on the network saw a huge decline as volume decentralized exchanges (DEXs) dropped. DEX volume recorded the first monthly decline since April and registered an almost 25 percent drop. As most DeFi activity is surrounding the Ethereum blockchain, the impact of the decline was also the most significant here.
Bitquery data reveals that the highest gas price paid to verify transactions dropped from 5.18 million gwei to 0.6 million gwei in October. This indicates that the competition to have transactions validated has decreased, and less activity is taking place on the network.
Regardless, the total transaction fees paid increased from $22 million in Q2 to $166 million in Q3. Most of this increase was due to the huge explosive growth of the DeFi sector with popular projects such as COMP that attracted investors. Furthermore, the yield farming trend also helped boost the network’s activity.
Furthermore, despite the decline in Ethereum miners’ revenue, they are still faring better than Bitcoin miners that earned around $41 million in fees.