Number of New Ethereum Smart Contracts Falls 60% in 2023

Dalmas Ngetich

2 years ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Ethereum prices might be solid, and bulls are looking to drive the coin toward $1,700, but on-chain data points to dropping activity from developers judging from the number of new smart contracts deployed in the first three weeks of January.

Number Of Smart Contracts Deployed On Ethereum Falling

The number of new smart contracts deployed over the past few weeks, since the beginning of 2023, has fallen by more than half. The number of new smart contracts deployed on January 1, 2023, stood at 139,699.

However, a total of 56,370 smart contracts were deployed on Ethereum on January 23, a solid recovery from the 10,079 figure registered on January 14, but still a long way from its January 1 levels.

The contraction over the past three weeks represents a 60% drop from January 1 levels, a concern for analysts. Ordinarily, the number of contracts deployed on a smart contract network points to on-chain activity, and the more dApps there are on any frontier, in DeFi, NFTs, gaming, and more, the higher the probability that this activity could spill into price action since ETH, the native token of Ethereum, is used to settle network fees.

Whenever there is a spike in on-chain activity, the demand for block space is higher, requiring developers to use more ETH for a slot in a block.

Falling contracts deployment coincides with the exemplary performance of ETH prices over the month. ETH prices have rallied from $1,200 on January 1 to $1,659 on January 20. Even though bulls are yet to push the coin above $1,700, an immediate resistance level that, if broken, could see ETH prices float to new Q1 2023 highs.

Ethereum Price on January 25| Source: ETHUSDT on KuCoin, Trading View

History shows a direct correlation between the number of contracts deployed and price action since developers often double down their efforts whenever prices are trending higher, deploying more contracts. This trend is not validated in the performance from early January, considering the divergence between spot prices and the number of contracts launched.

Even though there was a near 5X spike between January 14 and January 23, there could be a significantly higher number of contracts if this action were aligned with ETH prices.

Nevertheless, smart contracts on the Ethereum network saw solid growth in 2022. A report by the software firm, Alchemy, showed that over 100,000 dApps were launched in 2022.

Transaction Fees Falling

The average transaction fee on Ethereum has been on the rise since the beginning of the year, according to data from Cryptoquant. From January 1, fees have more than doubled, rising from $2.92 to $3.99 on January 23.

Even though fees are relatively higher now compared to the start of the year, they are multiples lower than in May 2022 when the average fee to post a simple transfer was $22. Subsequently, deploying smart contracts, depending on their complexity, was multiples higher.

Feature image from Canva, Chart from TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.