Gas fees skyrocket as Ethereum reaches $3.6k
Ethereum has witnessed a surge in its price, reaching $3,600, which has resulted in a significant increase in gas fees due to the rising network traffic.
According to Etherscan, gas fees exceeded 174 gwei by midday on Monday, impacting traders who had to bear substantial costs for their transactions within the Ethereum ecosystem.
The rise in fees has had a notable impact on various activities. For instance, completing a typical NFT transaction on Ethereum cost users over $372.29 during peak times on Monday.
Similarly, Ethereum’s token swaps and borrowing transactions have become costly, with fees reaching over $220 and $186 respectively. Transferring funds to another blockchain has averaged over $70 in transaction fees.
Uniswap, a prominent player in the Ethereum ecosystem, has been identified as the largest consumer of gas, with over $4.2 million worth of ETH burned in transactions in a single day. The increase in fees coincides with significant value surges in cryptocurrencies and NFTs, as Ethereum reached a milestone of $3,500 for the first time since early 2022, and a CryptoPunks NFT sold for over $16 million worth of ETH.
This fee hike comes before Ethereum’s upcoming Dencun upgrade, which aims to reduce transaction costs through proto-danksharding. Scheduled for March 13, this upgrade is expected to significantly lower gas fees, with several layer-2 developers suggesting that it could make such charges nearly obsolete.
“We are entering a world where most users will not have to deal with gas fees at all,” stated David Silverman, Polygon Labs’ VP of Product, indicating a future where the cost of transactions on Ethereum could be significantly reduced.
Read more: Ethereum Foundation makes $13.3 million ETH transfer, leading to market speculation.
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