Ethereum Gas Fee Hits 3-Month Making a Case for a Speedy ETH 2.0 Launch
Ethereum proponents who posited that the emergence of the London Hardfork will impact or solve the challenge of high network fees are clearly mistaken as the gas fee is gradually creeping back to new highs. According to Glassnode’s data, the average fee based on a 7-day Moving Average paid on the Ethereum network has topped 0.008 ETH ($25.96), the highest in 3 months.
📈 #Ethereum $ETH Mean Fee Paid (7d MA) just reached a 3-month high of 0.008 ETHView metric:https://t.co/ZdAIpLp2sY pic.twitter.com/oeZjbaidot— glassnode alerts (@glassnodealerts) August 28, 2021
Ethereum ranks as the most congested public blockchain network in the world and this has had an overbearing impact on the network fees, a development that became a great concern. Prior to the launch of the EIP 1559 upgrade, users are permitted to set their transaction limits, which gives miners the power to sieve out which transaction to confirm per time. This typically results in gas wars and thus making the network somewhat unusable.
The emergence of the London Hardfork was expected to change the narrative with a base fee being quoted by the network. However, the allowance to leave a tip for miners has proven to stir a subtle gas war, which is notably fueling the increasing gas fee.
The NFT Influence
A lot of transactions are known to be initiated on Ethereum-based Decentralized Finance (DeFi) protocol, all of which combined has a direct impact on the increasing gas fees. However, the growth in the Non-Fungible Token (NFT) metaverse has also considerably fueled the rise in the Ethereum network fees.
The average cost of minting an Ethereum-backed NFT is typically between $70 to $100, a range that can spike up to $200 to $300 at peak times. With daily transactions on NFT marketplaces like OpenSea and Rarible surging by the day, it is unsurprising to note the contributions of NFTs to the overall gas fee is not negligible.
Ethereum 2.0 to the Rescue
The design of the Ethereum 2.0 which will function as a Proof-of-Stake (PoS) network will allow for the processing of more Transactions Per Second (TPS). The current TPS on the Ethereum blockchain is barely 10 to 15, and this limitation is the source of the congestion fueling the increase in gas fees. This figure will be boosted to 100,000 TPS with the emergence of the PoS network, and as such, proffer a permanent solution to the congestion challenge.
While the emergence of EIP 1559 is a positive boost on the price of Ether per its deflationary properties, it is not helpful in terms of reducing gas costs. This is a case for the a speedy launch of Ethereum 2.0. Ethereum is changing hands at $3,245.73, up 0.15% in the past 24 hours.Source