As DeFi Deflates, Ethereum Users Get Reprieve From Soaring Fees, Congestion
A slowdown in cryptocurrency trading on so-called decentralized exchanges has helped to alleviate congestion on the Ethereum blockchain, at least temporarily mitigating concerns that the network was becoming overloaded. And with less traffic on the second-largest blockchain network, congestion has dropped, helping to reduce fee rates that had jumped as users paid up for priority transaction processing.
“Transaction fees on Ethereum are slowly returning to normal as the DeFi hype that gripped the market for most of 2020 is subsiding,” Nicholas Pelecanos, head of trading at NEM Ventures, an investment arm of the NEM blockchain ecosystem, told CoinDesk in a LinkedIn chat. According to Digital Asset Data’s Abendschein, the relief could prove only temporary for Ethereum users, since fees could quickly shoot back up if a new DeFi protocol emerges or prices rally for ether, the blockchain network’s native token.
