Ethereum has hit another all time high (ATH), even though the gas fees associated with using some complex DeFi protocols has increased above $1,000. This makes many decentralized finance protocols unusable for casual investors, with average Ethereum transaction fees now at a record $17.67, according to Cointelegraph. However, Bitcoin’s gas fees are not much lower.
But this is not deterring DeFi developers, who appear to be abandoning the so-called ‘Ethereum killers’, such as EOS, and sticking with the old guard. According to a Blockchain Development Trends report by venture capital firm Outlier Ventures, reported by Cointelegraph, “Ethereum remains the most actively developed blockchain protocol, followed by Cardano and Bitcoin.” The report adds, “while some new platforms such as Polkadot, Cosmos, and Avalanche are seeing an increase in developer activity, many of the traditional Ethereum competitors are seeing a decline in core development.”
You can read the Outlier Ventures Full Report here.
DeFi strength supports Ethereum
Certainly in 2020, the majority of DeFi platforms were Ethereum based, and even now “Ethereum still remains the king overall though, with 14% more developer activity than its closest rival, Cardano, and almost double that of Bitcoin in terms of commits,” Outlier Ventures says.
“Ethereum miners have been the key beneficiaries of the fee spike. The industry earned some $830 million in ether last month with 40% attributed from fees alone,” Coindesk reports, also noting that the increase in fees correlates with ETH’s current bullish price run, which also reflects the high demand for ERC-20-based tokens for stablecoin and DeFi projects.
It would also appear that Ethereum’s new ATH is bringing DeFi tokens along with it. Coindesk says: “According to research firm Messari, after ether went on a tear several DeFi tokens including chainlink (LINK), sushiswap (SUSHI) and aave (AAVE) followed the bullish trend, logging historic high prices Wednesday.”
Hunain Naseer, senior content editor at crypto exchange OKEX’s research unit, OKEx Insights said: “Ether made a significant push [since Tuesday] and that is causing projects linked to the DeFi space – as well as DOT, which is seen as a potential ‘Ethereum killer’ – to appreciate and aim for new all-time highs.”
Ethereum also got a big push from Grayscale, which added approximately 24,800 ETH on Tuesday, then worth more than $37.8 million, and it reopened its Ethereum Trust (OTCQX: ETHE) for accredited investors. This had been closed in late December, but as of 29th January 2021, the Grayscale Ethereum Trust had more than $4 billion in assets under management.
What is causing this price drive? It is thought that more investors are starting to see value in the projects behind these DeFi tokens, so market excitement is building. And with so many on the Ethereum blockchain, it seems the Ethereum killers may have more of a fight on their hands than they realised.