Lending Platform Consumption Soars, ETH Gas Fees Reach 1000 Gwei

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2022-05-15 02:39:24

The market fluctuates, the number of users trading to get out of DeFi platforms spikes, followed by ETH gas fees.

According to gas tracker Nansen, Ethereum’s gas cost spiked to 1000 Gwei on May 12. The network is facing a massive increase in usage after lending platforms reported a 3-fold increase in consumption. Now ETH gas fees have returned to normal levels.

Prominent names in making gas prices skyrocket include platforms such as 1inch, Uniswap and Tether. Lending and borrowing platforms are taking a hit. With the market volatile, investors are rapidly losing faith in leading stablecoin or DeFi solutions.

Crypto markets and stocks continued to decline after the US Bureau of Labor Statistics reported that consumer prices in April increased by 8.3%, higher than economists expected. This made investors afraid and caused a wave of withdrawals from risky assets, including cryptocurrencies.

The demand for money transfer out of liquid contracts increased, and transaction prices also increased. The spike in consumption reflects the sentiment in the market as traders are actively moving out of crypto in recent days into fiat.

Following the drop of the UST, the market is seeing massive capital outflows out of the DeFi industry. According to DefiLlama, the decentralized solutions industry is going through a period of severe volatility as TVL drops 24% in just one day.

A lot of faith and hope in #crypto will die even if Terra survives by miracle.

Within a week, total TVL across various chains dropped from $204 billion to $115 billion. DeFi industry indicators have returned to July levels as Bitcoin and other cryptocurrencies bottomed out just before the start of a fresh rally.

The cryptocurrency market has been under pressure for a long time. The Fed keeps raising interest rates, so stocks keep going down and cryptocurrencies too. Overall, the figures given have created uneasiness in the market, Bitcoin-backed stablecoins gradually losing their firmness.

DeFi-related tokens such as AAVE, ADA, and ATOM are no better as they lose more than 60% of their value in a few days. But DeFi isn’t the only industry reporting a sharp drop in cash flow. Cryptocurrencies like Bitcoin are also posting double-digit losses over the past few days, signaling a time of negative volatility for the entire world economy.

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