The popularity of Ethereum’s ecosystem is often one of the project’s most significant issues. Transaction fees on the network tend to skyrocket far too regularly. Even today, performing any transaction on the network will prove rather costly.
Ethereum Transaction Fees Are Complex
Ethereum’s transaction fees are a recurring topic for several years. Every so often, it becomes costly to move value across this blockchain. A high gwei price, combined with the amount of gas required to complete a transfer, can significantly increase transaction costs.
In the past few months, the overall transaction fees have posed problems. Although things return to normal eventually, the “gap of normalcy” is growing smaller. Part of this demand for network resources comes from DeFi and other industries on the Ethereum blockchain. There are also a few stablecoins and thousands of tokens residing on this network.
Judging by the chart above, the average gas price – in gwei – keeps heading in the wrong direction. Even with Ethereum hovering near $1,000, things are not improving. However, one has to understand the current gwei rate is only part of the problem. Other factors are at play as well.
To properly gauge the transaction fees, one has to understand how Ethereum works. The gwei price is a contributing factor. Furthermore, there is the amount of “gas” required to perform transfers. This amount has risen over the years, and spending over 100,000 gas is relatively standard.
As such, performing a “fastest” transaction on Ethereum today at 100,000 gas will cost 0.0439 ETH, or $41.79. Keep in mind that some DEXes and wallets will suggest gas prices over 140,000. The higher this value goes, the worse the fees will become.
Cheaping Out Isn’t Much Better
Ordinary people will suggest using the cheapest gwei option to perform an Ethereum-based transaction. It will take longer to complete, but it is also much less expensive. That said, at 100,000 gas, it still costs over $15.7 to move anything across the blockchain. Not necessarily an affordable option in hindsight.
The primary issue in this equation is the amount of gas required. As most wallets tend to focus on higher gas rates by default, users get punished as a result. It is possible to manually adjust these values per transaction in MetaMask, for example. Even so, one has to wonder why these high averages are still maintained today.
Until this situation changes, Ethereum’s growth will remain relatively limited. With such high transaction fees, there will be an increasing demand for alternative solutions. Several “Ethereum killers” continue to gain momentum in this regard. Dethroning Ethereum, however, will never come easy.
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