Ethereum Fees Plummeted 65% in October Following DeFi Volumes Back to Earth

Miners’ income from processing transactions on the Ethereum blockchain more than halved in October as the mania for decentralized finance (DeFi) cooled.

• Ethereum users paid $57.49 million in transaction fees in October – down 65% from September's record monthly tally of $166.39 million, according to data source Glassnode.
• "Transaction costs declined as volumes on decentralized exchanges dropped, reducing demand for network's bandwidth," Alex Melikhov, CEO and founder of Equilibrium & EOSDT stablecoin, told CoinDesk.
• Trading volume on decentralized exchanges fell by nearly 25% to $19.4 billion in October to register the first monthly decline since April. The majority of decentralized exchanges (DEXs) are based on Ethereum.
• Further, the maximum "gas" price – paid by participants to transact on Ethereum – declined from 5.18 million gwei to 0.6 million gwei in October, according to data source Bitquery. (A gwei is a billionth of 1 ether.)
• The sharp drop indicates there was less aggressive bidding by market participants for running transactions on the network, according to Denis Vinokourov, head of research at London-based prime brokerage Bequant.

• Total fees paid had surged from $22 million to $166 million in Q3, as the DeFi space witnessed explosive growth following the launch of COMP governance token by the lending protocol Compound in June.
• Such was the activity in September that ether miners earned over six times more in fees than bitcoin miners.
• And while ethereum miners earned significantly less from fees in October, they still made more than the bitcoin miners, who collected $41.20 million in fees.

Correction (Nov. 4, 2020): An earlier version of this article erroneously attributed the quote to Alex Mashinsky from Celsius. This has been corrected.

Also read: Record $166M Ethereum Fees Last Month Were 6 Times Bigger Than Bitcoin’s