- Ethereum has seen huge growth in Q4 2021, with revenue increasing 1,777% year-on-year as the ETH rise almost quadrupled.
- Locked value on Ethereum DeFi platforms increased eightfold, but transaction fees increased 557% to an average of $ 26, up from $ 4.
2021 was a huge year for Ethereum, as the project saw growth in almost every sector, from projects that build on their infrastructure to revenue and daily active launches. In the fourth quarter, this growth was at its peak and while ETH set a new record price of $ 4,860, its revenue increased 17 times from the previous year.
In its Ethereum State: R4 Report, Bankless cryptocurrency media outlet documented this growth, looking at some of the key metrics such as revenue, inflation, transaction fees, bets, and DeFi.
Companies issue quarterly reports. Protocols do not. So we did instead.
📑 Ethereum Status | Report R4 @BenGiove compared to Q4’20 to Q4’21. The numbers are telling!
We support protocol and ecosystem growth. And we have the numbers to create it.https: //t.co/QWC1YSg1e3
– Without Banks 🏴 (@BanklessHQ) January 13, 2022
Compared to Q4 2020, Ethereum’s network revenue increased a whopping 1,777% to $ 4.34 billion, up from a mere $ 231.4 million. For Ethereum, revenue refers to the transaction fees paid by users to use the platform. More significantly, 87 percent of this, or $ 3.78 billion, was burned and the outstanding supply was cut as a result of the EIP-1559 deflation mechanism.
Ethereum was also able to attract more users in the fourth quarter of last year, with the number of daily active addresses rising 35% from 425,636 to 572,700. This is quite significant, perhaps more than revenue. Daily Active Addresses shows the number of people who come to Ethereum on a daily basis, whether for DeFi, NFT, or simply for trade value. This number does not include shoppers and shoppers as they are unlikely to access their wallets every day.
Ether holders also showed much greater faith in the future of the network, as the amount of ETH involved increased by 471 percent. In Q4 2020, there were 1,545,486 ETH pledges, valued at $ 5.1 billion at press time. The network completed Q4 2021 with 8,818,933 ETH pledges, valued at $ 29.2 billion. This represents 7.3 per cent of total market capitalization, $ 395 billion.
DeFi Explosion adds Ethereum in Q4
In 2021, DeFi was the sector that gave Ethereum the biggest boom. In the fourth quarter, total locked value (TVL) increased to $ 154.2 billion, up from $ 17.73 billion in a similar period a year earlier, an increase of 770 percent. Curve, with more than $ 20 billion in TVL, remains the top spot in the DeFi ecosystem.
And not only did TVL grow. DeFi users trade daily on these platforms. In the fourth quarter, trading volume on decentralized exchanges such as Uniswap and Curve stood at $ 291.53 billion, an increase of 495% from $ 48.97 billion a year earlier.
Bitcoin also continued to flood the Ethereum ecosystem, with over 320,000 BTC now on the network as BTC (wBTC) folded renBTC and tBTC.
NFTs also posted a parabolic rise, with sales of OpenSea, one of the most popular NFT markets, rising 50,000%.
There were also disadvantages. One was the transaction fees charged to users, which averaged $ 26.89, up from $ 4.09 a year earlier, an increase of 557%. However, Vitalik may have a plan to solve this challenge with his latest proposal.