Remember the 2017 Ethereum fee mania? An even bigger buzz is being recreated now. On 1 September 2020, Ethereum fees broke all the previous records and touched an all-time high of $17 million. This is almost 3.7 times higher than the all-time high of 2017.
Recently, the Ethereum fees spike has become a regular trend. In the last 80 days, this is the third time when the ETH fee has spiked up suddenly. But what happened yesterday was beyond everyone’s imagination.
|11 June 2020||$3.5||Hack|
|12 Aug 2020||$8.5||YAM Token bug|
|1 Sep 2020||$10.33||DeFi and Tether|
The rising fee havoc!
Such a sudden spike in transaction fees is leading to delayed transactions, failed confirmations, and making users miss the trades. ETH user @truthraiderhq tweeted that he lost $40 when a transaction failed after 6 hours and he missed 4 trades.
In another tweet crypto trader and analyst, Josh Rager tweeted that he had to pay $40 to $70 fee per transaction. The skyrocketing ETH fees are not only impacting the users but the projects using the ETH network are also getting impacted.
Publish0X, the crypto agnostic platform for authors and readers announced that it will be delaying the weekly pay-outs due to rising gas prices.
Over the last few months, gas fees on Ethereum have been consistently high. DeFi apps, the explosion of Tether, and some scams are clogging up the network pushing the fees even higher.
Ethereum miner are minting money
Ethereum fees surpassed the Bitcoin network fees too. On 1 September, Bitcoin miners generated $1.5 million in fees which amounts to be only 9% of what the Ethereum miners generated. According to Glassnode, Ethereum miners generated $500,000 in transaction fees in one hour which is a new record high for a single hour.
Should we rejoice the skyrocketing Ethereum fee?
Undoubtedly, the exploding DeFi transactions are congesting the Ethereum network and leading to this fee hike. According to a Twitter user, someone paid $24 in fee to trade the 4-day old Sushi Token. This clearly indicates that users are ready to pay the price to ride the DeFi wave.
Someone is Buying n Selling SushiTokens on Ethereum Blockchain and paying $24 fees. God who are these people. Lol pic.twitter.com/AekSD7W2gI
— phoneinf (@phoneinf) September 1, 2020
The sudden surge of Sushi made us curious and we went all out to find what is happening around it.
Coming back to the Ethereum fees issue, many users believe such spikes are good for the overall ecosystem. Their reasons seem to be sound enough:
- A congested network leads to gas hikes and that means the adoption of Ethereum is going up which is a piece of good news.
- Such congestions encourage the development of scaling solutions.
- The high fees paid to the miners ensures higher network security.
Could this push users and developers away?
The ETH fees spikes are a matter of grave concern right now as it is making the network unusable unless you are ready to pay hefty fees.
While DeFi continues to explode, we might not see many users parting away from the Ethereum network. Similarly, developers have enjoyed the network effect like users, liquidity, and infrastructure of Ethereum for a long time. If they chose to migrate to some other network, they would have to wait for the same effects to be built on that network.
Thus in spite of fee issues, we might not see many users or developers heading towards other platforms.
Are there any solutions?
Well, everyone is eagerly waiting for ETH 2.0 to bring scalability to the network. But it does not seem to be happening very soon. Meanwhile, Fuse Network seems to have found a way around.
According to a tweet by Fuse, the users can easily port their smart contracts to Fuse and avoid paying heavy fees.
#Ethereum gas prices have soared due to high network congestion marked by the recent boom of #DeFi applications.
Fuse network is bridged to Ethereum mainnet so you can easily port your #smartcontract to Fuse and avoid paying exorbitant fees!
More info: https://t.co/Ev0NndHsPO pic.twitter.com/WxPs5NUuir
— Fuse (@Fuse_network) September 1, 2020
Fuse Network was featured in one of our low-market cap gems videos in the month of August. Do check this video out to know why Fuse Network sounds to be a promising project.
More on Ethereum
Ethereum Bulls Break Minor Downtrend But Is It Enough?