Ethereum miner profitability skyrockets

03 Sep 2020

The level of demand for the Ethereum blockchain has increased rapidly over recent weeks and months.

Indeed, the mania surrounding DeFi (decentralised finance) has spurred an increasing number of investors to decentralised exchanges such as Uniswap to trade ERC-20 tokens, reports News BTC.

Subsequently, this has resulted in a significant spike in the cost of fees to carry out transactions on the Ethereum blockchain, which have hit record highs, surpassing those registered during the 2017 and 2018 Initial Coin Offering (ICO) boom.

As a result, this has made Ethereum mining increasingly profitable, with standard GPUs (graphics processing unit) producing considerable returns each month.

Investors have been flocking into decentralised exchanges at an unparalleled rate over the last few months, making purchases of a variety of DeFi-related tokens.

This has led to huge gains amongst these coins, with many reporting returns of over 1,000% in recent weeks.

Indeed, so-called “yield farmers” have been undertaking Ethereum transactions to make the most of the highly profitable returns on pools within the ecosystem, with users having to make multiple transactions to move tokens between pools, the News BTC report adds.

As such, ETH fees have hit record high levels, reflected in the amount of ETH users paying each day. On Wednesday this metric peaked at 35k ETH.

In addition, daily fees have been increasing since the beginning of the year, however they only surpassed the 2018 highs at the end of July, when the DeFi craze started to grow at an unprecedented rate.

According to one ETH analyst: “It is stupidly profitable to mine Ethereum right now. These numbers are using my GTX1070. And this calculator doesn’t account for transaction fees, which right now are 4x the block reward. So a standard GTX1070 makes, after residential power costs, profits around $90 per month.”