Ethereum rates soar and reach almost 570 Gwei

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The demand for Ethereum (ETH) is soaring. As a result, Ethereum rates reached a new historic high on Monday (4): $ 1,771,317.01. This is an increase of almost 400% since the 1st of January. 

This increase is directly impacting transaction costs. As the IntoTheBlock analytics platform reported, the new fee record resulted in a substantial increase in the daily cost of gas to 569.31 Gwei.

It is worth mentioning that, as of today, the second-largest cryptocurrency in market value rose to $1,162. This is its highest value since February 1st, 2018.

At the time of writing this article, the cryptocurrency is valued at $1,025. This figure corresponds to an increase of about 20% only in the last 24 hours.  

Ethereum gas on high

Gas is the amount charged each time a smart transaction or contract is executed on Eth. These tariffs, paid to miners, increase as the demand on the Eth network grows.

According to Glassnode, Eth miners raised $898,000 in fees in just 1 hour, setting a new record. 

In parallel, these fees also make transactions on the Ethereum blockchain more expensive. On Twitter, Etherscan.io showed the correlation between the price of ETH and the costs of fees:

Reasons behind the higher rates

According to Charles Storry, cofounder of PhutureDAO, one reason behind the higher rates is the growth of the decentralized finance (DeFi) market.

This is because many DeFi protocols are run on the Ethereum network. The Uniswap protocol, for example, is the second-largest “consumer” of Ethereum’s Gas, behind Tether (USDT).

“With the current growing interest in decentralized finance, the network is reaching its highest levels of activity. One of the side effects of the network’s activity levels is the high gas rates that revolve around each transaction, ”noted Storry.

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