Miners’ income from processing transactions on the Ethereum blockchain over halved within October as the mania for decentralized finance [DeFi] seem to be cooled.
“Transaction costs declined as volumes on decentralized exchanges dropped, reducing demand for network’s bandwidth,” Alex Mashinsky, CEO and founding father of cryptocurrency lender Celsius.
Trading volume on decentralized exchanges fell by nearly 25% to $19.4 Bln earlier in October to register the primary monthly decline since April. The bulk of decentralized exchanges [DEXs] are supported by Ethereum.
Additionally, the utmost “gas” price – paid by participants to transact on Ethereum – declined from 5.18 Mln gwei to 0.6 Mln gwei earlier in October, consistent with data source Bitquery.
The sharp drop indicates there was less aggressive bidding by market participants for operating transactions on the network, consistent with Denis Vinokourov, head of research at London-based prime brokerage Bequant.
Total fees paid had surged from $22 Mln To $166 Mln within Q3, as the DeFi ecosystem witnessed explosive growth following the launch of COMP governance token by the lending protocol Compound in June.
Such was the activity in September that Ethereum miners earned over sixfold times more in fees as compared to the bitcoin miners.
And while Ethereum miners earned significantly less from fees in October, they still made over the Bitcoin [BTC] miners, who collected $41.20 Mln in fees.