According to Glassnode’s data, Ethereum’s hash rate has increased significantly compared to the beginning of the year. In addition, research shows that Ethereum miners have never been as active as they are now.
As the DeFi boom has intensified this year, Ethereum miners have pushed the network hash rate to a new historical high, rising to over 250T/S per second, a net increase of 80% since the beginning of 2020. The hourly real-time graph displayed on Glassnode captures the sharp change in hash rate.
This also means that network security has reached an unprecedented level.
To attack the blockchain network, you need to have 51% of the hash power to attempt network takeover. However, a higher hash rate means that an attacker needs to accumulate greater hash power before launching an attack.
DeFi is still the backbone of Ethereum’s rapid growth
DeFi has played a huge role in Ethereum becoming the main network this year. This year alone, the locked-in value of DeFi has more than tripled. So far, this rapid growth seems unlikely to change in the short term.
DeFi has attracted attention due to its high profitability. According to DeFi Pulse, the total locked value of DeFi smart contracts has now exceeded US$10 billion.
With projects such as Yearn, Uniswap and Compound, DeFi has become the focus of the spotlight, attracting investors. This success pushed the price of Ethereum (ETH) to a higher level.
However, this growth also exposed the fundamental problems of the network, causing exchanges to increase transaction fees to compensate for their daily losses.
If scalability cannot be achieved in the short term, it may harm the user experience
Critics emphasize the importance of user experience, which they believe may be affected by rising fees. In contrast, miners are on the profitable end, because the increase in hash rate may cause network congestion and force users to compete with each other by doubling gas fees.
In early September, Glassnode reported that miners earned more than $500,000 in fees in just one hour, the highest record in one hour.
Compared with Bitcoin, Ethereum’s fee gap is now up to 1 million a day. DeFi is not the only fuel for Ethereum network activities. Uniswap also plays a huge role in attracting new market participants.
According to Glassnode’s research, the income of miners reached a record high in August, reaching 18%. Miners may continue to make profits, but at the same time they will create room for poor user experience, which usually hinders DeFi projects in the short term.
