An upward move in bitcoin yesterday was also reflected in some altcoins that went another leg higher.

Currently, the hot market trend – DeFi tokens are moving higher. Today, the likes of Augur (19%), AirSwap (7.22%), Maker (6%), Kava (5%), Cred (4.45%), Gnosis (3.88%), Kyber Network (2.33%), and Loopring (1.14%) are some of the DeFi coins recording greens.

Yield farming is the latest craze in the crypto space, where yEarn’s YFI token, a governance token called “completely valueless 0 supply token” by its issuers, saw its value going from zero to as much as $2,500 overnight. The project has seen $150 million of deposits that yielded annual returns for some traders as high as $1,000%.

The DeFi sector has also surpassed $3 billion in total locked value. It is currently sitting now at $3.19B.

Over the past couple of months, mentions of DeFi have been following a similar trajectory as to mentions of flippening when ETH was gaining its “most hype” in the summer of 2017.

“Similar to the way many assets work with our social volume metric, when a subject becomes extremely mainstream, it's important to recognize that FOMO is a likely proponent of its popularity,” stated Santiment.

While DeFi tokens are enjoying FOMO and the subsequent surge in prices, ETH is trading at $244, keeping stable, much like Bitcoin.

In the past week, ETH only recorded gains of 1.43% and 6% green in the past month. While the DeFi tokens like Aave jumped 3,500% YTD, ETH has been up only 86.44%.

And this trend is expected to continue as “the assets with hyper growth and a lower starting valuation always wins in a bull market,” said Spartan Black of crypto hedge fund, The Spartan Group.

“While ETH will go up significantly, it will underperform the top DeFi tokens in this bull cycle just as BTC underperformed ETH during the last cycle,” he said.

DeFi frenzy is what is currently leading ETH fees higher and higher. ETH median fees are approaching $0.40 — highest since mid-2018.

Since the increase in Defi interest and usage, #Ethereum transaction fees have climbed rapidly and now account for over 20% of miner revenues pic.twitter.com/Ieo84hfGFE

— CoinMetrics.io (@coinmetrics) July 20, 2020

High fees signify there is a high demand for block space on the Ethereum network and further creating more revenue for the miners securing the network.

But high fees also means it has become expensive to send transactions on the network, especially for use cases like collectibles and gaming that demands large amounts of low-cost transactions, note Coin Metrics.

This further means, users will move on to another network as seen over the last week when the amount of unique active ETH addresses decreased despite an increase in transactions.

DeFi growth has also led to new all-time highs in the ETH transferred by smart contracts. For most of July, an average of more than 1 million ETH was transferred per day.

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