The sudden and dramatic increase in active addresses on the network has left many conjecturing about the cause.
On-chain metrics company Santiment says it is still investigating the cause of a sudden spike in active ETH addresses, which have eclipsed previous ATH by 48%.
On July 27, the analytics firm tweeted that the number of daily active addresses on Ethereum had suddenly reached 1.06 million, surpassing the previous high of 718,000 in 2018.
An active address is one that has made a transaction in the last 24 hours. The number of active addresses can indicate the level of activity in the chain of developers and projects that introduce updates to their work or platforms, and merchants that make simple token transfers.
However, Santiment says his team is still investigating the cause of the spike. CryptoTech also contacted Ethereum lead developer Tim Beiko to explain the unusual activity, but did not receive an immediate response.
Santiment on Twitter: “📈 #Ethereum shattered records Tuesday after an incredible surge in address activity broke its #AllTimeHigh by a wide margin. 1.06M $ETH addresses made transactions, & the team is still investigating the cause of the +48% increase over the previous record.
Coinbase’s chief strategist Conor Grogan posted in a Twitter thread that the increase in activity comes from a large number of token transfers per unit of gas rather than increased adoption.
He explained that the increase in active addresses is due to an increase in “regular” send/receive activity, such as “Binance doing a maintenance sweep,” as opposed to more “productive” decentralized finance (DeFi) and non-fungible token (NFT) activity.
Conor on Twitter: “Ethereum reached an all time high in “daily active addresses” today. Counter-intuitively, I don’t think this means that Ethereum has greater adoption than any previous time period. It means that send and receive addresses per unit of gas was at highs.
Active addresses had risen from their two-year low of 364,400 on June 26 with a noticeable smaller peak on July 16 to 583,000 according to Santiment data.
Related: Ethereum Prepares for Merger with 2.0
The daily active address metric for Tether (USDT) also saw a significant increase in active addresses over the past two days, July 26-27, possibly confirming Grogan’s observations of increased activity coming from simple token transfers.
Tim Beiko | timbeiko.eth 🐼 on Twitter: “📢📢📢 Goerli/Prater Merge Announcement 📢 📢📢 Prater will run through the Bellatrix upgrade on August 4th, and merge with Goerli between August 6-12th: if you run a node or validator, this is your last chance to go through the process before mainnet 🚨
The Goerli and Prater test networks for Ethereum are expected to merge into a single Goerli test network between August 6 and 12, according to a July 27 blogpost of the Ethereum team. The Ethereum mainnet is expected to transition to its own merger on September 19.
The increase in activity was followed by a 15.5% increase in Ether (ETH) over the past 24 hours, from $1425 to $1648 according to CoinGecko.