Miners' income from processing transactions on the Ethereum blockchain more than halved in October as the mania for decentralized finance (DeFi) cooled.
- Ethereum users paid $57.49 million in transaction fees in October – down 65% from September's record monthly tally of $166.39 million, according to data source Glassnode.
- "Transaction costs declined as volumes on decentralized exchanges dropped, reducing demand for network's bandwidth," Alex Melikhov, CEO and founder of Equilibrium & EOSDT stablecoin, told CoinDesk.
- Trading volume on decentralized exchanges fell by nearly 25% to $19.4 billion in October to register the first monthly decline since April. The majority of decentralized exchanges (DEXs) are based on Ethereum.
- The sharp drop indicates there was less aggressive bidding by market participants for running transactions on the network, according to Denis Vinokourov, head of research at London-based prime brokerage Bequant.
- Total fees paid had surged from $22 million to $166 million in Q3, as the DeFi space witnessed explosive growth following the launch of COMP governance token by the lending protocol Compound in June.
- Such was the activity in September that ether miners earned over six times more in fees than bitcoin miners.
- And while ethereum miners earned significantly less from fees in October, they still made more than the bitcoin miners, who collected $41.20 million in fees.
Correction (Nov. 4, 2020): An earlier version of this article erroneously attributed the quote to Alex Mashinsky from Celsius. This has been corrected.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.