Ethereum network usage hits a higher record, will ETH price also rise？

[Hugo Barbosa]

Recently, the interaction between miners and the Ethereum network has reached a record high, but the increase in fuel usage may cause problems for the cryptocurrency network.

According to a recent report from Delphi Digital, the total amount of gas used on the Ethereum blockchain has reached the highest level in history, and it seems that this number will continue to grow. Fuel is a means of charging the Ethereum blockchain. Since the beginning of 2020, the total amount of fuel used on the network has been rising.





The total amount of fuel used is different from the transaction cost indicator in the Bitcoin blockchain. On the Ethereum network, transaction and smart contract fees are determined by the required fuel and fuel prices. This mechanism allows fees to change dynamically and to some extent separate from the price of Ethereum.


The amount of fuel used in a given transaction depends on the computational complexity of the transaction. On the other hand, the price of fuel is selected by the person who executes the transaction and is priced in Ether. The price is ultimately determined by the Ethereum miners, who accept or reject the transaction based on the fuel price.



USDT and decentralized exchanges dominate.

Although the fuel usage reached the highest level in history, the number of transactions on the Ethereum blockchain is far lower than the highest historical record of 1,349,890 transactions reached on January 4, 2018.

This means that the increase in total fuel usage comes from the use of more smart contracts. Because smart contracts are more complex, more fuel is needed.

According to data from ETH Gas Station, the usage is mainly from USDT, and the Ethereum fuel cost alone cost $1.61 million. It was followed by DeFi applications and some scams and Ponzi schemes. USDT also leads the average fuel price used, at 35.5 Gwei.

Following the USDT stablecoin, the decentralized exchange (DEX) seems to be in a leading position in terms of popularity. According to DappRadar data, IDEX is the most used dapp in terms of the number of transactions alone, and IDEX and Kyber are both in the top three on the Ethereum network.

A recent survey also showed that DeFi's highest awareness and utilization rate come from decentralized exchanges.

Higher transaction fees and fuel restrictions

The increase in Ethereum network usage has led to an increase in average transaction fees because miners prefer to handle transactions with higher fuel prices. According to data from glass node, at the time of writing, the average transaction fee has increased five-fold from $ 0.08 in January 2020 to $ 0.41. This also accounts for about 10% of miners' income.

The total fuel usage is limited by the block fuel limit set by the miners, which limits the size of the Ethereum blockchain by determining how many transactions are in a block. The amount of fuel used in each block has been steadily increasing, from 69% in January to the most recent 95%, and is also close to the current upper limit.

Considering the current increase in fuel usage on the network and related block fuel restrictions, due to various factors, Ethereum may face network congestion in the near future. If fuel usage rises to the upper limit, users will have to compete with higher fuel prices to execute transactions and smart contracts.

In addition, a sudden plunge in the price of Ethereum may lead to higher fees and network congestion. As seen during the plunge on March 12, according to a report by The Block, the average fee cost increased from $ 0.16 to $ 1.04.

In this highly volatile situation, traders may find network congestion very troublesome, because the leverage positions of DeFi platforms and centralized exchanges may be liquidated before they take action.

When the usage is close to the limit set by the miners, it may be necessary to increase the block fuel limit. The most recent increase was in September 2019. The block fuel limit was increased by 25%, from about 8 million to about 10 million.

However, this change will further increase the size of Ethereum's blockchain, which has reached nearly 140 GB. Therefore, there seems to be no simple solution, and Ethereum faces considerable challenges in terms of scalability.

[ReeMartin]

Since the total supply of USDT increased a lot and that means more people try to use USDT and USDT (erc20) has been getting a huge demand rather than usdt in another chain.
I would not be surprised to see that as it will increase even more with the growth of USDT.

[IyemRoker]

Since the total supply of USDT increased a lot and that means more people try to use USDT and USDT (erc20) has been getting a huge demand rather than usdt in another chain.
I would not be surprised to see that as it will increase even more with the growth of USDT.

I also think that way where USDT has used the ERC-20 chain to launch transactions.
Where when it used to be still using chains from OMNI it was very slow and was not supported by fast transactions.

I think the GAS of the Ethereum Transaction is very much used by traders so this is a distinct advantage for Miners.

[Coin63@]

Very difficult to say but today's the last day of may 31...so new month june Ethereum price will possibly decrease. So some clever investors are selling some of his Ethereum at this moments. So you can also follow it.

[Cici Lee]

Take me as an example, I prefer to trade Bitcoin Options, as I could choose the different timing such as 1-min 2-min 5-min… Easy pieces during my way back home after work.

[Delgado]

The ethereum price has been growing very rapidly over the past month and a half. So, on the twentieth of July, the ethereum price was at $ 240. Today its price climbed to $ 482. That is, its price has doubled.
  Bitcoin during this time has grown from $ 9,300 to the current $ 12,000. Growth is a little less than a quarter.

[hair]

The ethereum price has been growing very rapidly over the past month and a half. So, on the twentieth of July, the ethereum price was at $ 240. Today its price climbed to $ 482. That is, its price has doubled.

This seems to be the effect of Ethereum 2.0 which is very fast with a lot of transactions per second. so that the demand for ETH is increasing in the market.

[Alcor]

The cryptocurrency market is now simply in a fever: the price of ethereum and bitcoin either skyrockets or falls immediately. Following them, the rest of the cryptocurrencies are alternately colored green and red. DeFi projects play an important role in this. Their YFI token is already four times the price of bitcoin. Information appeared that DeFi tokens began to be issued not only on the ethereum platform, but also on tron. Due to this, the Tron coin should also skyrocket in value.

[dodok]

It is true that currently gas prices are very high and it makes etherum holders disappointed, this is very detrimental to etherum holders if the price of this gas is not handled, this could result in etherum being left behind by investors, I hope gas prices will return soon to like  beginning.

[trauchot]

As we can see, the price of Ethereum can easily grow and at any time and big players can raise the price of Ethereum to incredible heights, but so far they do not do this for their own reasons, but so far the price of gas is very high and this helps big players to pump the price of Ethereum very quickly.

[Salman Hasan]

Take me as an example, I prefer to trade Bitcoin Options, as I could choose the different timing such as 1-min 2-min 5-min… Easy pieces during my way back home after work.

[Salman Hasan]

Take me as an example, I prefer to trade Bitcoin Options, as I could choose the different timing such as 1-min 2-min 5-min… Easy pieces during my way back home after work.

[Salman Hasan]

It is true that currently gas prices are very high and it makes etherum holders disappointed, this is very detrimental to etherum holders if the price of this gas is not handled, this could result in etherum being left behind by investors, I hope gas prices will return soon to like  beginning.

[Noverteno]

Ethereum usage has really grown a lot in recent months, however, its price can't go up high as the network can't handle so many transactions. The ethereum network's throughput remains one of the lowest, at 15 transactions per second. This has already caused discontent and disappointment of many participants in the cryptocurrency market. Some new projects, including DeFi, are forced to switch to other platforms. Hopefully, Ethereum 2.0 improvements won't be long. Only they can dramatically change the situation on the ethereum network for the better.

[Hometown]

Very difficult to say but today's the last day of may 31...so new month june Ethereum price will possibly decrease. So some clever investors are selling some of his Ethereum at this moments. So you can also follow it.

Not may 31 but till now Ethereum gas fee remains unchanged and even ridiculous higher than all time high. We cannot transfer our Erc20 token or coins from wallet to another exchange Wallet to sell.