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Ethereum smart-contract activity progressing with a record all-time high

Photo of: Sangeetha Golchha
by Sangeetha Golchha

DeFi craze is all over. As the DeFi protocols and decentralized exchanges have added users, the smart contract activity has increased more than ever. At present, the smart contract interactions on Ethereum are at record levels. As per the latest figures, the contract calls on Ethereum have grown exponentially almost to volumes that had not been witnessed before. The figures also outpace the levels that were recorded in 2017 which is now well above the previous highs from summer 2019 as per Glassnode data. 

The growth in calls to contracts from the external addresses in combination with high gas prices and other metrics that are considered in the process only goes on to show how DeFi and Decentralized exchange have driven the network to such limits. Contract calls refer to any transaction on the Ethereum blockchain apart from the simple Eth send will later interact with more than one smart contracts. For every transaction to work, a requisite gas payment or transaction fee also is required. 

In 2020 alone, external contract calls are up by more than 80%. This has been a record-breaking spree with more than 900,000 calls in a single day on August 10th. Compared to the figures recorded in late 2017 and early 2018 which showed an average call volume of nearly 300,0000 per day, it shows an increase three times more than the record. DeFi protocols have grown further to become the largest consumers of gas on the Ethereum network mainly because of contract call volumes. Out of the lot, proctors like Uniswap and exchange aggregator 1inch consume huge amounts in gas fees according to data from ETH gas station. 

Many DeFi protocols have also increased their popularity due to high user numbers. Dune Analytics reported the same by citing that the number of unique users in Decentralized exchanges such as Uniswap has increased by more than 75% in August alone while 1inch has expanded its users base by 35% which is significant in all respects. Data from Glassnode also highlights that there has been a huge surge in contract calls. This is easily an important indicator as it measures the complexity of the Dapps running on Ethereum. So along the line when the decentralized application development advances, smart contracts that are assigned tasks become complex at exponential levels. This could include collecting liquidity for a token swap throughout multiple exchange platforms so that the best possible price is achieved. 

Further robust numbers have been established, for instance, the number of internal contract calls increased by more than 240% right from the start of June. The major reason for this state has been triggered by mushrooming proposals of different clones of Yearn Finance and food-party yield farming projects like Yam Finance and Sushi to join the bandwagon latest. On a better note increasing the use and complexity of the smart contract systems on the Ethereum blockchain is a good sign of the healthy progress of the ecosystem. But the ever-increasing gas fees are also discouraging the users out of the market which could bring in some strong competitors to take it on.