Ethereum was priced at $438 at the press time according to data from Coinmarketcap, as the world’s second biggest cryptocurrency by market cap continues to enjoy the fruits of a pumping DeFi market.
DeFi helping ETH
The rise of Decentralized Finance applications has added to the surging price of Ethereum in recent months as investors climb into the yield farming sector. A number of major DeFi platforms have exploded in popularity over the past two months and this has directly driven the rising value of Ethereum.
The fact that DeFi and Decentralized Applications running on the Ethereum blockchain now account for just under 50 percent of the total value of the Ethereum ecosystem shows that these projects are driving the success of the smart contract platform. This data was highlighted by crypto research firm Messari last month.
This led to Ethereum overtaking Bitcoin in July as the blockchain with the highest daily settlement value – which is no mean feat.
As The Daily Chain reported this week, DeFi projects running on Ethereum are also causing ETH gas fees to sky rocket. Users are having to pay around $7.50 to have a transaction processed by the network.
While the rise of DeFi is great for the cryptocurrency space, the pressure it’s putting on the Ethereum ecosystem could hamper progress as well. The Ethereum network processed an all-time high of over $6mln in total fees on 13 August and these exorbitant fees could make it infeasible for some users and projects to continue working on the Ethereum blockchain.
ETH Futures factor in
As Cointelegraph reported, Ethereum Futures have hit a record high of $1.5 bln suggesting that traders are confident that the price of Ethereum may well climb higher.
Cryptocurrency analytics firm Skew highlighted this fact on Twitter:
These open interest futures are significant because these financial contracts are contractually binding and must be settled on their expiry date. There is no option not to purchase or sell the asset on the given date.
As Decrypt reported this week, open interest contract futures on Ethereum have completely outpaced Bitcoin this year.