According to analytics platform Blockchair, the average transaction fee on the Ethereum network has broken a new record, surpassing the $ 23 mark. This means that using the altcoin blockchain to make transfers and use decentralized applications is now more expensive than ever.
Rising fees have also made it more expensive to use DeFi-like protocols like Uniswap, which require even more gas for exchanges between different coins on a decentralized basis. Let’s understand the situation in more detail.
By tradition, let’s start with an explanation. The technical capabilities of the Ethereum network are limited. And although it can handle more than seven transactions per second, as Bitcoin does, due to the popularity of cryptocurrency and various projects on this blockchain, the ETH network is overloaded without any problems.
That is, since miners are the first to add to the new block those transactions for which the highest commission was paid, users are forced to compete with each other and increase the average fee. This leads to an overall increase in commissions within the network.
Since gas for transactions is priced in gway – the smallest particle of Ethereum equal to 0.000000001 ETH – the growth of the cryptocurrency also makes it more expensive in dollar terms.
This is a vicious circle: ETH is growing and attracting new investors, but their increased activity loads the network and forces them to spend more money on commissions. As a result, the situation will one way or another return to normal, but for now it is quite difficult for novice traders to carry out operations due to high commissions.
Tonight, the recommended gas price for a fast transaction exceeds 400 gvei, driven by a record rise in Ethereum above $ 1,700. And that’s a lot.
How much does it cost to send Ethereum?
The surge in transaction fees is largely driven by the rise in the price of ETH, which has led to an increase in demand for the cryptocurrency. The price of the cryptocurrency itself set a historic maximum yesterday, reaching the line of $ 1,688.
Here is what Martin Köppelmann, CEO of the decentralized exchange Gnosis, said in an interview with Decrypt reporters. His line is quoted by Decrypt.
The volume of transaction fees on the Ethereum blockchain reflects a wide range of events – from buying and selling ETH itself to the infrastructure provided by the system. In fact, many of the leading DeFi projects are based on Ethereum, so fees on Uniswap, Sushiswap, Compound, Aave, Balancer, Curve and other sites characterize the general state of affairs on this issue in the altcoin ecosystem.
That is, the expert’s point of view is clear. The growth of the Ethereum exchange rate attracted the attention of investors and, in addition, contributed to the increase in the value of other cryptocurrencies on this blockchain. Therefore, users undertook to invest and actively loaded the network. Because of this, commissions have grown.
According to the tracker CryptoFees.info, after the surge in fees and the price of Ethereum, its miners have earned more than $ 22.75 million in fees in the last 24 hours. This is four times the income of Bitcoin miners in the same period ($ 5.11 million).
We traditionally recommend mining Ethereum and other cryptocurrencies on the 2Miners pool. It supports different coins, contains a detailed description of the settings and has a clear interface. Try yourself in mining, including on one video card.
On average, Ethereum and BTC miners earn $ 15.81 million and $ 4.48 million per day, respectively. Notably, fees currently account for roughly 50 percent of ETH miners’ income, with the other half being block rewards. This means that the fees for commissions are now really high.
Alexi Lane, a spokesman for the analytical platform Ethplorer, noted that the explosive growth in fees and miners’ revenues can be attributed, in large part, to several key platforms in the ecosystem. Here is his line.
Behind this are the key industry leaders who spend gas, which each time raises the indicators to a new level. Uniswap, TetherUSD, 1inch Exchange and USDC with their increased activity have played a role in all of this.
As you can see, the hype around the decentralized finance industry, which began in the middle of last year, is not going to subside. And because of it, ordinary Ethereum users experience inconvenience, while miners are now making very good money. The cryptocurrency network is practically unusable right now if you don’t have at least a few hundred dollars to pay in fees.
We believe this situation reflects the incredible popularity of the Ethereum network and proves its importance in the modern cryptocurrency ecosystem. And although a regular transfer costs more than $ 25 today, and a swap on the Uniswap platform costs at least $ 200, users continue to agree to such conditions and conduct transactions. This means that the value of the blockchain and projects on it is higher for them than the cost of the operation.