Ethereum (ETH) Users Pay Only 10% of Network Fees. Who Pays the Rest? Glassnode Analysts Answer

News
Wed, 06/17/2020 - 10:47
Vladislav Sopov
The CTO of the Glassnode analytical team, Rafael Shultze-Kraft, reveals the sources of transaction fees in the Ethereum (ETH) network
Cover image via stock.adobe.com
Contents

Mr. Shultze-Kraft has identified the main parties responsible for transactions in Ethereum (ETH) and discussed the most meaningful processes.

Little stake

According to the researcher, end-users that use the network for Ether remittances, pay only 10.7% of all Ethereum (ETH) fees. This number has been steadily decreasing: one year ago it managed to spike over 30%.

Image via Twitter

In contrast, the share of transactions related to stablecoins is on the march. This share has been surging since 2019. The analyst revealed that as of May 2020, 20% of all Ethereum (ETH) transaction fees are from USDT transfers.

USDT makes up 92.8% of Ethereum-based stablecoins. Three other popular stablecoins, Paxos Standard (PAX), USD Coin (USDC) and DAI account for about 6.5% of the fees, combined.

High fees for zero-value transactions is another interesting phenomenon of the Ethereum (ETH) fee landscape. As unveiled by Mr. Shultze-Kraft, 

These transactions are most likely used for transaction cancellations during times of large network usage and high gas price volatility.

Contracts have an upper hand

But the most significant category of Ethereum (ETH) network fee contributors belongs to various contracts. Three different contract categories are most active in this regard.

The analyst pointed out decentralized exchanges, games and transacting tokens (e.g. $POCC and $WENI) as the top payers of this category. But Ponzi schemes are responsible for the bulk of fees in this category.

The most active Ponzi, as covered by U.Today Crypto News, has consumed up to 15% of all of the resources of the Ethereum (ETH) network. The total amount of fees it has paid is inching closer to 6,000 ETH, Glassnode calculated.

Among the 'legitimate' decentralized financial instruments, the top payers are Kyber Network, IDEX and Oasis DEX protocols.

About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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