Ethereum Fees Rise 70% to Continue Record-breaking Streak

[kolbalish]

Ethereum fees are rising again following a brief drop from all-time highs, but DeFi activity is keeping them from falling any lower.

Even as prices settle after a massive crash at the beginning of the month, Ethereum fees have remained elevated for a record-breaking stretch.

Ethereum transaction fees, paid to broadcast ETH transfers or interact with smart contracts on the Ethereum network, have remained above two dollars on average for a full month, starting August 10—longer than any previous run above that level, according to data from BitInfoCharts.

During that time, average transaction fees rose as high as $14.58 on September 2, before falling back to $2.67 on September 9. Now fees are rising again, a sign that activity on the network is picking up again, and DeFi-mania is far from over.

Fees for Ethereum (and also Bitcoin and other cryptocurrencies) are determined by network activity. Blockchain transactions are processed by miners with limited capacity. When transactions are being broadcast then miners can comfortably manage, transaction fees rise.

This gives an incentive for miners to add more processing capacity in the form of higher fee rewards, while also theoretically reducing the number of transactions being broadcast from users not willing to pay higher fee costs.

Ethereum transaction fees rose 70% to $4.55 on average between September 8 and September 10. The price of Ethereum also increased during that period, but only by about 4%, to $363.36.

Average transaction fees on Ethereum have only been sustained above two dollars twice before, according to BitInfoCharts. The first time, in early 2018, Ethereum fees remained above that threshold for just 10 days, between January 5 and January 15. The second occasion came during the summer of 2018, when Ethereum fees held above two dollars for seven days from July 1 to July 7.

Now, transaction volume is such that average daily fees have not had a chance to dip below two dollars since August 10. And with the recent reversal from fees that were falling before September 8, the streak seems set to continue.

The continued strong activity is powered by DeFi applications drawing in billions to be used for making loans and providing liquidity for token swaps on decentralized exchanges. Recent DeFi activity on Ethereum has been so strong, economic activity measured by the value of tokens being moved throughout the network surpassed that of Bitcoin for the first time in years.

Ethereum prices may be down from recent peaks, but fee activity on the network is suggesting the excitement and money flowing into DeFi projects may not be finished just yet

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[OcTradism]

People will be charged with less fee for their transactions if they understand how fees are charged on the network, from demand and supply rule.

ETH/ERC20 - Check and select good Gas price
If you check fee with https://ethgasstation.info/calculatorTxV.php, the average fee is 98 Gwei, about 4 times than when I made my topic (19.8 Gwei). Fortunately, the average fee today is lower than last 1 or 2 weeks when it stood above 150 Gwei.

You can choose alternative coins for cheaper fees and wait till Ethereum network become less crowded or when Ethereum 2.0 comes to use the chain for you fund movement.
Comparative table on fees among some coins. Pick up one for your need.

[Ekyfitri]

the increase in ethereum network fees is not as strong as last week. the possibility of experiencing another increase may occur. There has been confirmation beforehand that there is a problem with the ethereum network. Currently, transaction fees on the ethereum network have decreased considerably. but sometimes in the middle, we can even see that the fee decreases when not many people make transactions. is this really because of DeFi or because of improvements to the ethereum network itself. what is certain is that this must be addressed immediately by the ethereum development team.

[hatshepsut93]

Ethereum people used to criticize Bitcoin for having high fees and claiming that Ethereum will replace it because it's more scalable. But it's clear that having only a few times more capacity than Bitcoin is not enough to having spikes of transaction volumes, you would need much bigger blocks for that, and this would make any coin completely centralized. Even now it's very hard for users to run their Ethereum nodes. and in the near future it would be only possible for datacenters. This would make Ethereum closer to banks rather than Bitcoin.

[Akiko]

This huge traffic in the ethereum network makes it even slower and costly. May be EOS can be a solid ground for the DeFi project. These high transaction fees occur because of DeFi investors. Maybe we will saw another wave of high fees if the market again gains momentum because the DeFi hype isn't gone yet though recently we saw gas fees decreased.

this can be a reason why other project will move to other platform since they always have problem in using eth platform  and being congested many times.
Not that high for today fees but it can still increase someday if they don't find any solution to make it faster and affordable for every one.

[OcTradism]

The average fee (in Gwei) on ETH network has some spikes in August and September but the average fee has not yet increased too much. It increases sure but not increase and cause a disaster for ETH users.

Early today, the average fee is 98 Gwei, now it is 81 Gwei. Fee will be low again. Fast rise fast drop!

The chart is taken from https://blockchair.com/ethereum

[Iyeman]

The fees on ethereum network is totally depends on the transaction that happened in the network. More transaction and more fees as people are wanna sending their money on the swap service as soon as possible.

It looks like this article is only discussing about what factor that makes the fees of ethereum has increased a lot.

The fees is also getting affected by the trend that happened in the crypto too. We know that ethereum as a blockchain that being used by bunch of platforms for the tokenization.

[mr.smith]

This huge traffic in the ethereum network makes it even slower and costly. May be EOS can be a solid ground for the DeFi project. These high transaction fees occur because of DeFi investors. Maybe we will saw another wave of high fees if the market again gains momentum because the DeFi hype isn't gone yet though recently we saw gas fees decreased.

I nominate Tron as another ground for DeFi projects in fact there are already DeFi projects on Tron like Oikos if the fees on Ethereum continues to be high new coming DeFi project will have to think of other options than creating one in Ethereum it's not attractive anymore and a big headache for traders.

[Reid]

Could it also be because of the users trying to get a cheaper fee?
They pick the slow method (Metamask) while there is an option of average and fast which is not that high from slow.

I mean, if all have picked the right fee instead of the cheapest then there would be lesser traffic now even with the DeFi hype being unstoppable.
Or, do other users need to sacrifice waiting for all of this to end before they can maximize using Ethereum again.

[Yaunfitda]

the increase in ethereum network fees is not as strong as last week. the possibility of experiencing another increase may occur. There has been confirmation beforehand that there is a problem with the ethereum network. Currently, transaction fees on the ethereum network have decreased considerably. but sometimes in the middle, we can even see that the fee decreases when not many people make transactions. is this really because of DeFi or because of improvements to the ethereum network itself. what is certain is that this must be addressed immediately by the ethereum development team.

The problem arises with the current spike of ETH's prices plus the Defi hype. Of course, they don't need confirmations are everyone can see it in their blockchain and many are already complaining about the huge spike in fees, similar to what we have seen in Bitcoin last 2017. If Eth 2.0 will be release to answer the scaling problem then good, however, it's no assurance. It's easier we wait till everything settles down for a bit before making any transactions or shoulder the burden of high fees specially if you are in a hurry.

[wanted sliter]

The attractiveness of DEFI projects may return to the news that Ethereum 2.0 was released in November. In the next 2 months, GAS prices may rise much more than before.
I have imagined people moving to Tronix in the rush of DEFI projects but maybe Ethereum has more followers and it is happening right now.
https://en.ethereumworldnews.com/ethereums-eth2-0-could-launch-as-early-as-november-2020/

[luckyflop]

Defi is the main reason of all these gas fees and they are taking it too long for ETH 2 , where they said they are going to use POS instead of POW , If it wants to go like that Dapps and tokens would rather use Polkadot blockchain, where its fast and fee is very small .

[btc78]

 :)This happens in networks when the currencies are too much hype or being bump,specially now that ethereum has been in good position for month now.

the Fees even in In Bitcoin transaction Grows High and not just that High even more.

So i think this is normal and you can choose gas to use.

This huge traffic in the ethereum network makes it even slower and costly. May be EOS can be a solid ground for the DeFi project. These high transaction fees occur because of DeFi investors. Maybe we will saw another wave of high fees if the market again gains momentum because the DeFi hype isn't gone yet though recently we saw gas fees decreased.

This is temporary as all Both Bitcoin and Ethereum experienced this,EOS is great option but it depends on the Dev if they will push using their platform or not.

So still no choice for now But ethereum to use,Or convert to XRP or Litecoin for lower fees.

[noorammak]

There are many reasons for an increase in the fee, which can be according to your explanation and it could be due to the following 2 reasons.
First is news that Binance enables Eternal contracts with YFI
https://www.cryptoknowmics.com/news/binance-launches-leveraged-perpetual-contracts-for-yfi-token/
Next up is the expected release of Etherem 2.0 in November of this year.
https://en.ethereumworldnews.com/ethereums-eth2-0-could-launch-as-early-as-november-2020/

[Vishnu.Reang]

A lot of the users here are mentioning about Ethereum 2.0. Last year, Vitalik was in favor of an early rollout of ETH 2.0, but he warned the users that if they haste it too much, then there may be security issues present in the algorithm. Already Ethereum has a resputation of having several security vulnerabilities and the last thing they want is to release ETH 2.0 before all the bugs are identified and removed. This is going to be a historic blunder.

[Tipstar]

The current rise in ETH fees are disadvantageous to the already defamed image of ethereum as a platform token. Smart contracts breaks when they don't have enough fees, people would spend more on transaction than what they are trying to achieve in dapp. It is destroying any surviving gambling dapps on the platform. The ETH 2.0 better be good enough to redeem the network, if not, there's no future for Ethereum.

[kolbalish]

The average fee (in Gwei) on ETH network has some spikes in August and September but the average fee has not yet increased too much. It increases sure but not increase and cause a disaster for ETH users.

Early today, the average fee is 98 Gwei, now it is 81 Gwei. Fee will be low again. Fast rise fast drop!

The chart is taken from https://blockchair.com/ethereum

Yes the gas fee is so high rather than our habitual things from the last few years. Because it has been a long time still the gas fee is high now and many people are waiting to see the low gas fee. But the average gas fee can't determine it because of it's high implement.

[Febo]

Ethereum Fees Rise 70% to Continue Record-breaking Streak

If value of Ethereum drop to $35, then Etehreum fees would suddenly be ten times lower and normal again. It is not that easy fro Vitalik to do that. His promises to deliver in last years were all false but price of Ethereum still had not dumped. So on my opinion Ethereum future will be very expensive.

[jostorres]

I believe this is just a temporary thing because of the defi hype, it is not going to be sustainable for them neither, we are going to eventually see something major that will make defi hype die down as well. Remember just a year ago or so how IEO was the big deal, we have seen stuff with a billion dollars investment as well and it was all the talk in the bitcointalk forums as well, look at it now, nobody cares about it and nobody really chases after them aside from bounty hunters.

It means, at max in 6 months or so defi will be absolutely nothing and that means eth blockchain will be left alone and when that happens price of fee's will go down as well. If none of that happens, I am sure coders will figure something out ot make it a lot faster again.

[BayAngelo]

i don't think it is the problem of the latest Kid in the block(the defi) project. i think it is as a result of the sudden utlization of the Uniswap platform. an unexpected surge in UNISWAP Usage lead to the insane fee raise. this has nothing to do with DEFI saga. what i find disgusting is that the fee after transactions in centralized and decentralized exchanges.