Ethereum Gas Prices Hit New Heights, Network Users Hope For A Solution From Developers
As the latest DeFi project has boomed over the past day, Ethereum has stalled as high gas prices continue to hold the network back.
The fee for carrying out transactions on the Ethereum network are called gas fees which are paid to miners facilitating transactions. When activity on the network picks up, users have to assign more competitive gas rewards to transactions in order for miners to process their trades. Gas fees have become a problem zone for Ethereum as the popularity of the network has pushed prices upwards, sometimes to the point where paying the fee isn’t worth carrying out the transaction for the network user.
On Wednesday, August 12 the median gas price on the Ethereum network increased by 53.2% over the course of 24 hours hitting 177.359 GWEI from 115.805 GWEI the day before. As of writing ETH Gas Station — a popular reference website — recommends attaching 266 GWEI to a transaction for it to go through. A gas price above 200 GWEI has only been recorded 5 times over the past 4 years, Etherscan data shows. The spike in price has frustrated Ethereum users and raised serious concerns over DeFi’s potential for success.
One possible explanation for the through-the-roof gas prices is the launch of the latest yield farming platform YAM which has exploded after launching on Tuesday, August 11. In the first 24 hours following its launch the YAM token is already trading at $14.53 and $543,224,041 of value has been locked in. As DeFi enthusiasts have hopped aboard the YAM bandwagon, the Ethereum network is facing greater congestion leading to the higher gas prices. COMP, the leading yield farming token, is also up 49% over the past day, according to Messari data.
As gas fees hit new heights, Ethereum users expressed mixed feelings on a Reddit thread. Many were excited by the high demand for the network, but emphasized that the fees are harmful to smaller developers who can’t afford to keep their projects running with such a large cut of their profits being taken off the table.
Several conversation participants expressed hope that developers would soon present a solution to Ethereum’s scaling problems and hopefully before the illusive and long-awaited release of Ethereum 2.0.
By Emily Mason