Ethereum miners made $169M in September thanks to the DeFi boom

Ethereum miners made a huge fortune in September thanks to the Decentralized Finance boom, which resulted in a steep increase in Gas fees on the Ethereum Network.

The rise and fall of decentralized finance (DeFi)

2020 has been the year of decentralized finance (DeFi), as this sector has garnered massive popularity and interest within the crypto community. Although DeFi has been spoken of for many years, nobody predicted the massive rise this year.

DeFi protocols boomed overnight, with tons of investors moving towards this sector as they look to make rapid gains from different gains. Within a few weeks, several DeFi protocols hit all-time highs, with some multiplying their initial price.

Chainlink, the oracles protocol, led the charge, with its native token LINK surging from $1.54  per unit to an all-time high of $18.80 within the space of five months. This sharp rise from LINK caused a ripple effect within the DeFi sector as projects like to yearn.finance surged from $0 to $41,273 within weeks, enriching those that got involved in the project early.

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Decentralized exchange UniSwap also saw an increase in liquidity on its exchange, surpassing 3 billion in volume in recent weeks. This boom led to comparisons to the ICO bubble from 2014-2017, and some projects suffered technical flaws, with Yam.finance initially losing 99% of its value due to a flaw in its governance token.

Currently, the DeFi craze seems to be losing steam, with most decentralized finance protocols losing much of their value in September. This is expected as the speculative sentiments that initially drove their price has lost its force.

Ethereum miners make record earnings

Despite the increasing waning interest in DeFi protocols in September, Ethereum miners continued to make massive profits in September. Since most of the DeFi protocols are built on the Ethereum blockchain, the rise of DeFi has increased the number of daily transactions performed on the Ethereum blockchain.

The DeFi boom has harmed the Ethereum network as it has led to clogging of transactions due to competition for block spaces, which invariably led to an increase in transaction fees. 

Ethereum miners made around 450,089 ETH during September, which is equivalent to $169 million as at the time of publications.

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During this period, Bitcoin miners only generated $29 million, which shows the huge disparity in income between both protocols. This increase in earnings has not been without controversy, with Coinbase recently pushing the costs of gas fees to users on the platform. There have been calls for the quick deployment of Ethereum 2.0 as a solution to rising transaction fees.