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Miners Push Ethereum Hash Rate to New Record High Amidst DeFi’s Explosive Dominance

Mining 2020/10/06 22:11 by Olivia Brooke
Miners Push Ethereum Hash Rate to New Record High Amidst DeFi’s Explosive Dominance

DeFi’s explosive dominance has given room for many Ethereum projects to thrive and the Ethereum network as a beneficiary of this rapid growth has not been left out. Once again, the buildup in network activities has propelled the hash rate to a new all-time high. According to data from Glassnode, a cryptocurrency on-chain analytics platform, Ethereum has hit a new record high in hash rate as a result of transaction fee upsurge emerging from the DeFi hype.

Ethereum Surpasses 250/T per second

The Ethereum network has just surpassed 250 transactions per second while remaining above 80% since the year began. The hourly live chart displayed on Glassnode captures the sharp movement in hash rate, which took a fast dive above the 225T/S level and is now headed for a crossover above its new milestone. With the constant upswing in network activities on the Ethereum network, the remaining part of the year may see network activity hit groundbreaking highs.

Miners Push Ethereum Hash Rate to New Record High Amidst DeFi’s Explosive Dominance

DeFi continues to be a pillar for Ethereum’s rapid growth

DeFi has played a huge role in Ethereum becoming of this year’s most dominant network, regardless of the long-term scalability issues that the network is trying to tackle. This year alone, locked in value for DeFi has more than tripled and till present, it seems unlikely that this swift, organic growth will not be altered anytime soon. In September, the Ethereum network hit a historic all-time high in daily transactions; the highest number processed in the history of Ethereum. Once again, this can be credited to the increase in network activity. However, this growth has continued to expose the underlying problem of the network, causing exchanges to increase transaction charges so as to make up for their everyday loss.

User Experience may be tampered with if scalability isn’t achieved in the near term

Meanwhile, critics have continued to hammer on the importance of user experience, which they claim could be affected by the ever-increasing fee charges. In contrast, miners are on the profiting end as an increase in hash rate could potentially cause network congestion, and force users to compete against each other by doubling their gas fees. In the first weeks of September, Glassnode reported that miners earned over $500,000 in fees within just one hour; the highest record high in a single hour.

Against Bitcoin, the Ethereum fee gap is now up to 1 million in a day. DeFi is not the only fuel behind Ethereum’s network activity, Uniswap is also playing a huge role in attracting incoming players to the market. The end result is a growing miner revenue which, according to research by Glassnode, hit an all-time high at 18% in August, might continue to profit miners but at the same time create room for poor user experience which could generally hinder the DeFi project in the near term.

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