Ethereum DeFi Ecosystm Hits 2 Million Users as ETH Price Paints ATH

By George Georgiev

image1

The Ethereum DeFi ecosystem has hit 2 million users. The number of unique Ethereum addresses that have interacted with Ethereum-based protocols, as shown in the chart below by Dune Analytics, has seen a sharp increase recently, with volume ramping up heavily within the last 2 months.

Source: Dune Analytics

Record Users and Record Prices

During this period, ETH has been hitting record highs, going from $738 at the start of the year to $2,637 right now. Today, the price also charted a brand new all-time high above $2680.

This signifies a clear demand for ether as a currency and transaction medium since DeFi protocols are only getting bigger and more popular.

Decentralized applications built on the Ethereum blockchain have seen vast volumes, with ETH gas prices skyrocketing in March (albeit they have come down a bit this month). Some of the most popular protocols that run on Ethereum include USDC, a USD stablecoin issued by Circle, 1inch, an exchange aggregator, and USDT.

Standing at number one is Uniswap, the largest decentralized exchange on Ethereum. Over $2M in ETH gas fees has been spent on Uniswap transactions in the last 30 days alone, further indicating the massive rush of volume the DeFi and cryptocurrency space as a whole is experiencing.

Growth Compelling Competition

Growth like this has been seen across the board, including on platforms that compete with Ethereum. The most popular competitor to Ethereum is Binance Smart Chain, a platform created by Binance, one of the largest cryptocurrency exchanges in the world.

Binance Smart Chain has seen even more explosive growth, and transactions on BSC (in terms of pure numbers) have risen to over 5 times those on Ethereum, mostly owing to PancakeSwap. Solana and Fantom are two other popular blockchains that are seen as potential ETH disrupters.

Transactions are extremely cheap on competitive blockchains, but this comes with its trade-offs. For now, when it comes to having inclusive costs, Ethereum is not in the lead — but this is set to potentially change soon.

Ethereum 2.0 is currently in the final testing phase and is set to make all actions, including contract interactions and token transfers on the Ethereum blockchain, far cheaper by switching from proof-of-work to proof-of-stake validation. How this will pan out and how competitor blockchain volume/popularity will react remains to be seen.