Ethereum miners are making a killing from transaction fees. In August alone, the miners raked in a total of $113 million in profit, up more than 3,660% from the $3 million earned in April, according to the latest data from Glassnode.
This is the highest ether miners have earned from transaction fees ever. The previous all-time high of $64 million was reported in January 2018, said the crypto analytics firm.
Fees have risen so high that on September 1, ETH miners made a record profit of over $500,000 in just one hour. At the time of writing, it cost about $6.57, on average, to send a transaction over the Ethereum (ETH) blockchain. That compares with fees of just $0.09 in April.
Analysts blame the soaring transaction costs on the continuing hype within the decentralized finance (Defi) space, which has grown into a $9 billion industry within a matter of weeks.
According to Etherscan, defi protocols such as Uniswap, which is built on the Ethereum blockchain, is one of a few with the highest network utilization. Tether (USDT), Sushi Swap, and Yearn Finance (YFI) are the others.
As the ethereum community continues to show concern over steep fees, developers have been testing technical solutions to reduce costs and improve efficiency, including a network upgrade dubbed Ethereum 2.0. But the project is still several months away from coming to fruition.
Ethereum co-founder Vitalik Buterin says investors will have to utilize layer two technology to get around the issue of high transaction fees. He tweeted on Tuesday:
To those replying with ‘gas fees are too high’, my answer to that is ‘well then more people should be accepting payments directly through zksync/loopring/OMG’. Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to… use it.
However, in an earlier tweet, Glassnode observed that the Ethereum blockchain was growing at a rate of 260 megabytes each day – something that might not be so good for the network.
“That is a 2x increase since the beginning of the year. And 40% higher than Bitcoin’s current blockchain growth rate – which is at an ATH (186MB per day),” it said.
Meanwhile, by comparison, bitcoin (BTC) miners earned $39 million from transaction fees in August, almost three less than Ethereum miners. Ether shot up more than 11% to $483 during the 24 hours to September 1, as per markets.Bitcoin.com data. The coin traded at just above $400 two days earlier.
What do you think about the soaring Ethereum miners’ income? Let us know in the comments section below.
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