The rising popularity of decentralized finance (DeFi) has brought fresh attention and optimism to the cryptocurrency sector with the total value locked on all protocols increasing from $1 billion to $59 billion in less than a year and the top 5 platforms accounting for $24.33 billion of the total value.
Rising gas fees have been one of the most noticeable results of the increasing interaction with DeFi protocols and currently, the Ethereum (ETH) network hosts the majority of the top DeFi projects. Gas fees have been steadily rising since November 2020 and reached a peak on Feb. 23 when the average transaction cost reached 373 Gwei which is approximately $11.72 at the current Ether price.
Since Feb. 23, fees have declined by 65% with the average cost dropping to 131 Gwei on March 3 and data shows that certain times of the day offer fees below 70 Gwei.
DeFi transactions decreased as the market corrected
One possible source for the declining gas fees seen over the past couple of days can be found by looking at the daily decentralized exchange (DEX) volume.
Data from Dune Analytics shows that trading volume on DEXs has been on the decline since peaking at $4.35 billion on Feb. 23 and the DEX daily 24-hour growth metric was down by 50% on March 3.
According to Connor Higgins, a data scientist at Flipside Crypto, fees have