Gas fees return to early 2020 levels, but Ethereum and DeFi have undergone radical changes

Winkrypto

特邀专栏作者

2021-06-15 10:56 (UTC+8)

This article is about 1075 words, reading the full article takes about 2 minutes

Today, the total locked position of Ethereum DeFi exceeds 60 billion US dollars.

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Today, the total locked position of Ethereum DeFi exceeds 60 billion US dollars.

Translated by: Lu Jiangfei
Translated by: Lu Jiangfei

From what I can recall, the last time Ethereum gas fees were at their current lows was around early 2020, when Aave was first released. Compared with that time, Ethereum and DeFi have changed a lot, it is time for us to review.

The average daily settlement volume between ETH and stablecoins alone on the Ethereum blockchain now exceeds $45 billion. According to data from CoinMetrics, in early 2020, this figure was less than $900 million, which was also lower than the transaction volume of Bitcoin at the time.

Today, the total locked position of Ethereum DeFi exceeds 60 billion US dollars. In early January 2020, the metric was worth about $700 million, mostly ETH and a small amount of ERC-20 tokens deposited into Maker to mint DAI.

Now, DEXs have begun to "eat" the market share of centralized exchanges. DEXs have many advantages, such as permissionless access, support for long-tail assets, and deeper order books. Just on June 13, Uniswap's transaction volume exceeded $1.1 billion, higher than Bitfinex, Bitflyer, and Bitstamp.

As more and more developers flock to Ethereum, the Truffle development environment has been downloaded more than 5 million times.

Since January 2020, an additional $20M has been allocated to Ethereum developers and community members via @gitcoin. The first quarter of 2021, the largest quarter of funding distributions to date, reached $6.5 million in total funding, which equates to approximately $3,000 in distributions per hour.

Ethereum 2.0 has already begun to bear fruit. In early 2020, Ethereum 2.0 was heavily criticized by the Bitcoin community and other crypto communities due to its delayed launch. But now, the value of ETH pledged on Ethereum 2.0 has reached 14 billion US dollars.

Bitcoin is also flocking to Ethereum. Today, the number of bitcoins anchored on the Ethereum blockchain has exceeded 239,847, accounting for more than 1% of the total supply of bitcoins. At the beginning of 2020, the number was less than 1,000.

Frankly speaking, DeFi is mainly focused on one thing in early 2020: lending (basically providing lending services through MakerDAO). But today, we have seen the expansion of DeFi use cases to many fields, such as: trading, synthetic assets, asset management, etc. It is expected to expand to the derivatives market in the future.

So, why are Ethereum Gas fees dropping? What is the reason behind it?

Actually, Polygon is probably driving this, and of course, BSC and Solana also play some roles. However, the price of ETH also dropped accordingly.

But will DeFi disappear because of this? I do not think so. Polygon’s consistently full blocks are proof of this, with billions of dollars already locked in its smart contracts.

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