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

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Wed, 06/17/2020 - 10:47
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Vladislav Sopov
The CTO of the Glassnode analytical team, Rafael Shultze-Kraft, reveals the sources of transaction fees in the Ethereum (ETH) network
Ethereum (ETH) Users Pay Only 10% of Network Fees. Who Pays the Rest? Glassnode Analysts Answer
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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%.

Users pay only 10.7% of Ethereum (ETH) network fees
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.

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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.)

2,500,000 Ethers Locked in Ethereum 2.0 Deposit Contract as ETH Rejected From $1,250

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Fri, 01/15/2021 - 18:02
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Vladislav Sopov
Ethereum 2.0 enthusiasts deposited whopping sum in its contract launched six weeks ago
2,500,000 Ethers Locked in Ethereum 2.0 Deposit Contract as ETH Rejected From $1,250
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While crypto markets are trying to get out of the most painful correction in this bullish cycle, the Ethereum 2.0 deposit contract accomplishes another crucial milestone.

ETH2 deposit contract surpasses $3,000,000,000 level

According to leading Ethereum network observer Etherscan, the Ethereum 2.0 deposit contract (0x00000000219ab540356cBB839Cbe05303d7705Fa) allocated more than 2.5 million Ethers. New 32-ETH stakes are transferred to it every minute.

ETH2 deposit contract breaks above $3B
Image by Etherscan

As the correction of the Ethereum (ETH) price ended, ETH is changing hands at $1,225: the $1,250 level was too difficult for bulls to conquer. Meanwhile, even at press time, it is worth almost $40,000 to join the club of Ethereum 2.0 stakers.

Therefore, the USD-denominated value of assets locked in the contract surpassed $3 billion for the first time ever and keeps surging.

It should be noted that Ethereum 2.0’s deposit contract went live on Dec. 1, 2020, heralding the start of ETH2 Pase Zero or Beacon Chain, the inaugural stage of Ethereum 2.0.

Ethereum 2.0 “entry tickets” become really expensive

At press time, more than 52,267 addresses transferred money to the deposit contract.

Ironically, Black Thursday in Crypto (March 13, 2020) was the most convenient time to join Ethereum 2.0 staking with Ether at $95. Today, Ethereum (ETH) enthusiasts should pay 13 times more to have a minimum amount of Ethers required for staking.

Ethereum 2.0 is a proof of stake (PoS) iteration of the Ethereum (ETH) protocol. It replaces mining by staking and splits the whole Ethereum (ETH) network into several interconnected sub-chains (shards).

According to Staking Rewards analytical dashboard, annualized rewards for ETH staking are estimated between 10.4 and 10.6 percent.

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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.)