- Ethereum network traffic reaches new levels
- ETH supply shifting towards smart contracts
- Ethereum network blockage drives gas price
Ethereum users have been exerting immense pressure to the ethereum blockchain in recent days causing ethereum network blockage. The network has seen increased demand as users interact with smart contracts, AMMs, DEXs and many other activities leading immense transactional volume to the blockchain.
As a result of the massive congestion, ethereum transaction fees have gone through the roof. Moreover, the sky-high fees have directed investor funds to alternative layer ones, with arguments emerging on which ‘ethereum killer’ might tap a substantial proportion of the market.
More ethereum held in smart contracts compared to exchanges
Furthermore, the Defi hype has established another fascinating trend for ETH besides the elevated transaction fees. Ethereum traders have been massively moving their holdings from crypto exchange platforms and transferring them to smart contracts. At the moment data suggests there is a greater number of Ethereum tokens retained in smart contracts than in smart contracts.
This actual trend might be affirmative for ETH’s price, as the tokens become harder to access for trading, which can result in a positive price action movement.
Ethereum network blockage goes through the ceiling
DeFi is almost solely developed on ethereum and boosts the network’s demand through several features. The users keen to obtain tokens take advantage of AMMs or DEXs to acquire them. However, every single changeover needs authorization and a real swap. This procedure alone has coerced the ethereum network.
Notably, the yield farming trend has blended the procedures, with traders locking their crypto assets under smart contracts and cash reserves to make profits on their investment. According to blockchain analytics firm Santiment, the current ethereum network blockage is the highest it has ever experienced.
Moreover, users might have to fork out more than $60 in transaction fees to have their transaction handled without delay during pinnacle activity moments. Furthermore, Glassnodes data shows that ETH supply is shifting towards smart contracts, suggesting that the elevated gas price may not fade out anytime soon.