With the rise of decentralized finance in the crypto world, Ethereum has been experiencing a volume of transactions that resembles the 2018 boom.
In 2018, Ethereum reached a record in value and number of transactions as a result of the initial coin offering (ICO) boom that year. As the launch of Ethereum 2.0 approaches, many investors are preparing for the Staking feature that the update will include collecting Ether (ETH) and maintaining it.
Decentralized Finance (DeFi) has now experienced incredible growth and adoption in recent months amid the COVID-19 pandemic, despite the global economic crisis.
Most DeFi platforms run on the Ethereum network and are probably a reason behind the increase in activity and the volume of transactions, which has resulted in rising gas prices and activity in sectors such as games powered by Ethereum.
Ethereum transactions are increasing
On January 4, 2018, the largest number of transactions occurred on the Ethereum network, with a total of 1,349,890, while on July 13, 2020, the number of transactions was 1,151,834, according to Ether's verification. .
DeFi tokens represent 1.44% of the total crypto ecosystem, according to CryptoSlate, with the sector value of tokens like Compound, Aave and Synthetix at about $ 455 million in the past few days.
The DeFi sector has become a key factor for the Ethereum ecosystem, as the growing interest from investors is having a direct impact on ETH value and turnover, with no indication that it stopped before the launch of Ethereum 2.0.
Ethereum's high prices are affecting other niches
With gas prices rising every day as a result of the high demand experienced by the network, sectors like blockchain games have seen a decrease in activity, as stated by the Blockchain Game Alliance in its latest report.
The impact of a $ 5 fee on small transactions resulting from gaming activity is much greater when compared to a transaction for hundreds or thousands of dollars that a DeFi transaction can have.
Currently, Ethereum users expect Ethereum 2.0 to result in a reduction in gas prices, as applications and other platforms have shown no interest in migrating to Tier 2 solutions. For now, DeFi activity seems to be the most important thing when it comes to Ethereum's success in the coming months, as the network approaches its next launch.