Ethereum’s Rising Price Brings Soaring Transactions Again

Ethereum’s rising price brings the soaring transactional fees once again because of the high demand on the ETH network. As a result, transaction fees surged upwards and the users took it to Twitter to pour out their frustration about it as we can see more in today’s ETH news.

Ethereum’s rising price brought back up the transaction fees which increased 400% since the start of the year. The increase has not only caused traders to incur higher costs on the transactions but also led to questions about the mainstream potential of the cryptocurrency itself. According to Glassnode, ETH transactional fees hit a high of $898,000 in one day which beats the last time that they increased in 2018. The Gas fees which measure how much it costs to execute the transaction on the network are in constant flux. The Gas fees increase as the demand on the network grows but despite them growing and signaling stronger demand on the network, the fees make it more expensive to perform a transaction on ETH.

Gwei is a small fraction of ETH and it is used to measure gas fees on the network so according to Etherscan.io the fees increased from 64 Gwei on January 1 to 309 Gwei today up by 382%. According to Etherescam.io the high gas fees are also rising which is because traders are paying more to get their transactions confirmed quickly. The gas fees were around 240 Gwei which has now risen to 700 gwei, marking an increase o 191%. One reason why the ETH network is generating higher gas fees is because of the growing decentralized finance space which runs on ETH.

The CEO of Nansen, Alex Svenevik, and co-founder of D5, shared his experience on the rising gas fees on Twitter as he was asked to pay $23 dollars for approval and $83 for an undisclosed transaction. Charles Storry, the co-founder of Phuture DAO said:

 “With the current growing interest in decentralized finance the network is hitting its highest activity levels. One of the side effects of the network activity levels is the high gas fees which revolve around each transaction.”

The rise in gas fees prompted crypto supporters to question whether the blockchains can ever become mainstream:

 “Are blockchains only for the wealthy? Do only the wealthy consider these transactions ‘good value for money’?”

Ethereum users are eager to see the Layer 2 scaling arrival which will move user transactions away from the ETH blockchain.