Forget rent, utility, food, and personal expenses; a US-supplied $1,200 stimulus check would have covered just one Ethereum transaction as of today, new data shows.
Transaction fees on Ethereum, the world’s second-largest cryptocurrency network by market cap, reached an unprecedented level for some traders earlier today, fuelled by the rise in DeFi projects and a new Initial Coin Offering, or ICO (remember those?).
Josh Rager, the founder of crypto trading platform Blockroots, pointed out on Twitter that fees reached the $1,200 level, while he attempted to purchase the tokens of MYX Network, a so-called “DeFi and deflationary” project:
Was going to get in the $MYX presale prior to Uniswap
As it turned out, the MYX token had specific smart contract issues causing it not to accept transactions below a certain GAS threshold. GAS works as “fuel” for the Ethereum network, and is a fee paid to miners to execute a trade.
Su Zhu, the founder of trading firm Three Arrows Capital, even joked about the high fees on Twitter, “spending more money on GAS for ethereum than pretty much anything else in real life now.”
ok, spending more money on gas for ethereum than pretty much anything else in real life now https://t.co/hZ1ZGQPAk2
While fees have since relatively dropped to sub-$200, they remain staggeringly high for a network that aims to become the world’s next monetary system. At press time, the average fee for an ETH transaction is $6 but can reach up to $200 based on the speed of transfer and liquidity.
Gas fees have hit a record high on Ethereum. Image: ETH Gas Station.
“Yield Farming” pushes Ethereum to its limits
The high fees are a direct result of a “yield farming” frenzy led by projects with funny-sounding tokens like Yam and YFI, which has seen “farmers” lock-up capital that can be borrowed by others for a significant interest rate, which is, in turn, paid back to the “farmers.” This creates potential returns of as high as 1,000% per year, at the cost of severe network congestion, potential scams, and a high dose of risk.
Unless you are "farming" in the thousands of dollars, it is simply uneconomical to take part. You can quickly burn $100+ in five minutes to engage with these contracts.
Unsurprisingly, Uniswap, the decentralized exchange on which such tokens can be purchased, has seen traders pay the highest GAS fees, over $3.1 million in the past month. It is followed by stablecoin Tether and Forsage, a crypto scam that originated in the Philippines.
Publicly traded Brazilian fintech company Méliuz has dubbed itself the South American's first Bitcoin treasury company after spending over $28 million on the cryptocurrency.
Méliuz, a Brazilian household name that offers customers cashback coupons and trades on the country's oldest stock exchange (B3: CASH3), first announced its plans to buy Bitcoin in March, sending its stock soaring.
And on Friday, after announcing it had snapped up 274.52 BTC for $28.4 billion, at an average price of $101,7...
Ukraine may be planning a strategic state crypto reserve, according to reports by local media. If it follows through, it would potentially join nations like El Salvador, Bhutan, and the U.S.—who all already have reserves.
Yaroslav Zhelezniak, the country’s first deputy chairman of its Committee on Finance, Tax and Customs Policy, told local crypto publication Incrypted that he plans to submit a new bill for approval “in the near future,” claiming the bill is in the finalization stage.
Kirill Kho...
A growing number of companies are launching Solana tokens as a way to circumvent traditional fundraising methods. Tokens linked to these companies are hitting market capitalizations in the millions or even tens of millions—despite growing concern that many of their products are “vaporware.”
“Internet capital markets is itself a powerful meme, and it’s among the most significant and OG meta-narratives and use cases for crypto,” Alon Cohen, co-founder of Pump.fun, told Decrypt. “In principle, it r...
