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All good things come at a cost—and in this case, skyrocketing prices across the crypto market have also triggered an equally steep rise in Ethereum gas fees.
On Ethereum, massive levels of network traffic pushed gas fees beyond 174 gwei by midday Monday according to Etherscan, incurring significant costs for traders attempting to complete various types of transactions within the blockchain’s ecosystem.
To give an indication of the severity of the gas fee uptick: The average charge to complete a typical NFT transaction on Ethereum eclipsed $372.29 at certain points on Monday. This means users, even if they were swapping profile pictures (PFPs) among friends for free, would have to pay hundreds of dollars just to see those transactions completed.
Swapping tokens on Ethereum cost almost as much at several points on Monday, upwards of $220 per transaction. Such prohibitively expensive fees potentially eliminate the value of certain crypto transactions, as the costs could eliminate any potential profits from flipping tokens.
Borrowing on Ethereum cost above $186 per transaction at certain points on Monday; attempting to escape such steep prices by bridging funds from Ethereum to another blockchain cost over $70 on average.
In the last 24 hours, the largest gas guzzler in the Ethereum ecosystem has been Uniswap, a protocol for trading fungible ERC-20 tokens. Over $4.2 million worth of ETH has been burned completing transactions on the platform in the last day.
The uptick in exorbitant on-chain surcharges comes as cryptocurrencies like Ethereum and Bitcoin—as well as on-chain assets like NFTs—are experiencing massive surges in value.
On Monday morning, ETH hit $3,500 for the first time since the start of 2022. Minutes later, an Ethereum-based CryptoPunks NFT sold for a whopping $16.03 million worth of ETH, the second-highest price ever fetched by a piece in the popular PFP collection.
The gas fee surge also comes just days before Ethereum’s much-anticipated Dencun upgrade, which is set to substantially reduce transaction costs on Ethereum layer-2 scaling networks via a novel data storage method called proto-danksharding.
Several layer-2 developers recently told Decrypt that they anticipate Dencun will so significantly reduce gas fees in the Ethereum ecosystem, that the concept of such charges may soon become obsolete.
“We’re going to enter a world where most users are just not going to experience gas at all,” Polygon Labs VP of Product David Silverman previously told Decrypt, “and it becomes abstracted away.”
Edited by Andrew Hayward