If one would examine transaction fees closely, one would realize Ethereum had a rough time these past few weeks. A trader said a reminder: “Ethereum hasn’t won yet.”
In the past few weeks, the network has experienced a high number of adoption. For instance, Santiment reported that Ethereum had the highest daily active address count in over two years. In a similar manner, the daily number of confirmed Ethereum transactions exceeded one million, recently.
As a result, transaction fees have heightened sharply. Tradeblock shared data saying the cost of transacting on the network is at multi-year highs. It says:
“With the rise in DeFi apps, majority of which are built on Ethereum, ether gas fees hit recent highs, meaning transaction costs across the network have risen in order for timely transactions to occur.”
Ethereum’s proponents have different take regarding how developers should react.
Some traders say that high fees are a good thing. They imbue Ethereum with more demand and emphasize the strong fundamentals of Ethereum. On the other hand, others are saying fees are a crucial issue that needs to be dealt with as soon as possible.
“Ethereum Hasn’t Won Yet,” says a Trader
Transaction fees continued to be unbearable to many, even after a firm pullback from the local highs.
Kevin Beardsley, the Head of Business Development at Kraken’s futures division agreed to the sentiments of many other users. He recently wrote on a tweet:
Numerous stakeholders seem to be not so proactive in mitigating high fees as fast as possible.
Furthermore, one spectator commented that there really is no point in raising the gas limit to try and lower fees. Moreover, the commentator said blocks are going to get filled right back up because of large financial incentives on-chain. On the other hand, other users have been silent regarding the fees, seemingly showing a “this is fine” attitude.
The co-founder of Concourse Open Community, Scott Lewis, that this kind of attitude and satisfaction could be a dangerous thing. The user and industry executive recently posted a tweet saying:
It just means Scott Lewis thinks the community may be somewhat naïve thinking that retail investors will not opt for alternative platforms.
The best way Ethereum can start to fight the cheaper and faster transactions of other chains is through layer 2 solutions, in the short term, that is. Ethereum has its own networks built on top of the mainchain, just like how Bitcoin has the Lightning Network.
A partner at the Spartan Group, Kevin Koh, said that Skale Network is a feasible layer 2 solution for Ethereum.
However, in the longer run, a successful transition to Ethereum 2.0 ay ameliorate the fee concerns permanently.