DeFi transactions "cannibalize" Ethereum block capacity

Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: SAMUEL HAIG, reproduced by Odaily with authorization.

Editor's Note: This article comes from

Cointelegraph Chinese (ID: CointelegraphChina)

, Author: SAMUEL HAIG, reproduced by Odaily with authorization.

Data released by Ganesh Swami, co-founder of ETH analytics firm Covalent, shows that decentralized finance (DeFi) transactions are making up an increasing share of Ethereum block capacity, while the share of ETH transfers is declining.

Swami analyzed the gas costs incurred by Ethereum transactions over time to estimate the share of network activity represented by ETH transfers, simple ERC-20 transactions, and complex interactions with smart contracts typically associated with DeFi protocols. Compare. Because, the gas fee generated by each transaction category is constantly increasing.

DeFi transactions "cannibalize" Ethereum block capacity

Swami pointed out that “the total amount of gas consumed by all types of transactions seems to be a natural upper limit”, which shows the “strong demand for ethereum’s block capacity” and its network’s “lack of scalability”, he added:Covalent

“In an ideal scalable blockchain network, all types of transactions have room to grow. But in today’s Ethereum, the growth of one type of transaction must cannibalize the share of other transactions.”
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The relative share of gas fees generated by each transaction category on Ethereum:

The graph also shows the ups and downs of ICOs, with ERC-20 transfers accounting for 20% of network activity in early 2017. For the rest of 2017, ERC-20 transactions hovered between 10% and 15% of network activity, before slipping to 5% by mid-2018.

After briefly rebounding to 10% in the final months of 2018, ERC-20 transactions have been on the decline, with ERC-20 transfers now accounting for less than 5% of Ethereum network activity.