The number of active addresses on the Ethereum ($ETH) network has mysteriously jumped to a new all-time high, with nearly 1.1 million ETH addresses transacting in a single day to make a total of 1.64 million transactions.
That’s according to data from on-chain analytics firm Santiment, which shows that the spike shattered the previous record of daily active addresses on the network of the second-largest cryptocurrency by market capitalization of 718,000 back in January 2018, when the cryptocurrency was nearing its then-new high of $1,400.
The surge occurred during a recent meeting of the U.S. Federal Open Market Committee (FOMC), which is a brand of the Federal Reserve System that determines the direction of U.S. monetary policy. The meeting led to an interest rate hike of 75 basis points.
It’s worth noting that a daily active address is defined as one that made a transaction over the past 24 hours, with the number of daily active addresses indicating on-chain activity for developers and projects.
One active address does not necessarily mean one active user, as anyone can create as many addresses as they’d like on the Ethereum blockchain. While one user can have hundreds of addresses, some addresses may be related to hundreds of users by belonging to services custodying their funds.
The team behind Santiment noted it was still investigating the daily active address spike, as experts struggle to understand what happened for the sudden spike. One proposed theory was that of Coinbase’s Head of Strategy Conor Grogan, who suggested the rise came from a high number of token transfers per unit of gas, rather than from growing adoption.
Per Grogan, the rise could be because “the market weighed mundane things to do (send/receives, like with Binance doing a maintenance sweep) at highs versus what most of us would classify as “productive” activity like Defi/NFTs (which are more gas intensive).”
The rise came shortly after Ethereum’s long-anticipated transition from an energy-intensive proof-of-work (PoW) consensus mechanism into a more efficient Proof-of-Stake consensus, has been projected to occur in September.
The Ethereum Merge describes the network’s current mainnet merging with the Beacon Chain’s PoS system, setting the stage for future scaling upgrades, including sharding. The move is expected to reduce Ethereum’s energy consumption by 99.95%.
Tim Beiko, an Ethereum protocol support engineer at the Ethereum Foundation, made the September projection at a PoS Implementers Call. Beiko has noted that the Merge timeline is very likely to change over time.
It’s worth noting the Merge is not expected to reduce Ethereum’s transaction fees, but will have a significant immediate impact on energy use while opening the door for upgrades that will reduce transaction fees.
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