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ETH Transaction Cost Hits New High Not Seen Since 2015: Report

The ETH Transaction cost has recently hit a new high that was not seen since 2015, despite being stagnant on value. The demand for the transactions continues to increase every day and this is mainly because of the growth seen in the decentralized finance space. In our latest Ethereum news, we take a closer look at the analysis.

According to the Etherscan data, the ETH transaction cost hit a new high level after continuously increasing day after day. This is mainly because of the growth seen in the Defi space as coins and protocols are pertaining to this space and most of them are based on Ethereum which means that the network racked up thousands of transactions attempting to satisfy all users. According to the Etherscan data, the fees are hitting highs not seen since the summer of 2015. This indicates that the developers are needed or the users that seek low-cost transactions and smart contract interactions will get squeezed out.

gwei cost
Chart of the average gas cost (Gwei) of Ethereum transactions from Etherscan, shared by Alex Kruger, a cryptocurrency analyst and economist.

Alex Kruger also shares this sentiment after he posted a graph where we can see the average “gas” that one is paying for ETH transactions is now on a high level that it was previously in 2015:

 “High demand is driving Ethereum gas prices up. The 30 day average gas price has recently reached levels only seen in the summer of 2015, right after Ethereum launched.”

The analysts see that a fix is needed to solve the fee issue otherwise smart contract focused assets such as Tezos or Cardano are expected to chip away from the market share as Qiao Wang explained:

 “I’ve changed my mind after using a dozen of Defi platforms. So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.”

It seems that solutions to Ethereum’s transaction fees are on their way, as the final public testnet of the ETH upgrade launched last week. Dubbed “Medalla” the testnet indicates that the launch of the ETH2 upgrade is a month or two away. ETH2 will implement Proof of Stake and sharding as the two technical processes that will work together to increase the efficiency of the blockchain. In the short-term, the second-layer solutions are being adopted to boost the speed and lower the costs of ETH transactions.

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