The last 7-days have been rather lively for the collective digital asset industry as Bitcoin breached above $9333 for the first time in 2 weeks. Other assets were taking advantage of the minor bullish wave as well but the narrative of Ethereum has been quite different in comparison to Bitcoin.
According to Coinmetrics’ recent State of the Network report, Bitcoin’s number of transactions in the chart has decreased slightly in the charts, which is likely due to the Cloudfare DNS outrage. The implications led to the minor collapse of wallets, as they become inaccessible for a small period of time. In spite of a little downturn, Bitcoin’s transaction fees were up by 54.5 percent over the weeks, signifying improved demand for block space right before the recent rally.
Ethereum and DeFi; ETH Continues to be Undermined
Now, although Ethereum had a rather lack-luster period in terms of price valuation, its transaction fees continued to rise. As observed in the charts, Ethereum median fees are currently meditating near July 2018 highs. Now the high transaction fee is a sign of an active and healthy network but there is a question behind its spike. Rather than the utilization of Ether, DeFi is the main reason behind ETH fees spike. The typical demand behind block space is being created due to the DeFi’s transaction volume on the Ethereum network.
The disparity is further available in the chart below.
In spite of a spike in transaction count, the number of active addresses for Ethereum was plummeting in the charts evident of the fact that not many unique were floating in the network. The report added,
“Another sign of DeFi’s growth, the amount of ETH transferred by smart contracts is surging towards new all-time highs. There’s been an average of over 1M ETH transferred per day for most of July (7 day average).”
Is DeFi is overtaking Ether on Ethereum?
To clarify any doubts, it is important to understand that DeFi tokens definitely depend on ERC-20 tokens. However, it is unlikely that any impact facilitated by Ether on DeFi ‘s functionality will be impacted outside Ether ‘s utility to pay for gas prices.
What DeFI is currently generating for its investors is a platform where potential capital funders lock up ETH to generate either DAI or other tokens, which is then leveraging a long ETH.
Recently, the introduction of the Compound Governance Token has given a massive boost to Total Value Locked under DeFi, which has surpassed $2 billion.
During the same period, Ether ‘s value has yet to witness a price up-scale, which begs the question that the parent token of the most widely used blockchain is not capable of sustaining high importance.
Right now, community users expect the rally to eventually flow into Ether ‘s path as well, which will make sense technically, but it hasn’t happened yet, and some questioned whether Ether will be left behind while Ethereum’s blockchain attains more relevance.