Ethereum (ETH) Transaction Fees Growing Problem

0

The DeFi ecosystem is truly dizzy, rising from $ 1 billion in total locked-down value earlier this year to now $ 8 billion and more.

However, increased demand for decentralized finance (DeFi) protocols built on top of the Ethereum network pushed transaction costs – known as “gas fees” in Ethereum – to the highest levels this month, pointing to rising instability.

“Transaction fees are a big problem for many of our customers,” Alchemy’s CEO and co-founder Nikil Viswanathan said in an interview with Forkast.News.

Alchemy provides infrastructure and developer support for companies building DeFi projects to run or access nodes in Ethereum. According to Viswanathan, Alchemy supports more than 70% of Ethereum best apps and $ 2.8 billion worth of assets locked in DeFi.

“One of our main focuses is solving all the difficulties [developers] face when building these apps, and in this sense, the issue of transaction fees is at the top of the list,” said Viswanathan.

In a previous interview with Forkast.News, Ethereum co-founder and ConsenSys founder Joseph Lubin explained that the problems with rising transaction fees are an issue with scaling the network. “We are constantly hitting this scalability ceiling in different ways, and we need to do that first to figure out what needs fixing,” said Lubin. “So we will continue to deal with scalability.”

Ethereum (ETH) miners earned $ 285.1 million from transaction fees last August, according to a study by TheBlock. This represents an increase of 98.2% on a monthly basis and the highest level in 25 months.

Ethereum Fees Increase

With the increasing interest in the DeFi market, the interest in Ethereum, the power behind it, naturally increases. Miners on the network are also enjoying the benefits of the network with increased interest.

See Also
Ethereum (ETH) Price Analysis: August 30, 2020

The main reason for this increase in the past month is that many new DeFi projects have been launched and some of these projects are listed by major cryptocurrency exchanges globally.

Due to this density in Ethereum’s network, there was an unnecessary increase in gas expenditures and each transfer increased to a minimum of $ 10-15. The date that miners earned the most in a day was August 12 with 30,500 ETH.

Ethereum developers are also working on new ways to lower the high gas fees required to run the network. Vitalik Buterin, the founder of Ethereum, also needed to make a statement about this problem, which will probably be solved with the Ethereum 2.0 update.

Vitalik Buterin Made a Statement

Ethereum Founder Vitalik Buterin acknowledged the problem in his statement on Twitter and stated that Ethereum users can overcome this problem by using second layer technologies.

“Those who say the transaction fee is high can make their payments directly through zkysnc, OMG and loopring. They can overcome this problem by using very simple payment methods. “


LEAVE A REPLY

Please enter your comment!
Please enter your name here