Home Coins Ethereum (ETH) $99 Gas Fees on Ethereum Are Crippling DeFi’s Growth

$99 Gas Fees on Ethereum Are Crippling DeFi’s Growth

The surging popularity of decentralized finance (DeFi) protocols on Ethereum (ETH) has contributed to skyrocketing fees, with the network processing an all-time high of $6.87 million in total fees yesterday. 

Speaking to Cointelegraph, Synthetix (SNX) founder and CEO, Kain Warwick warned that high fees were impacting the growth of DeFi, stating:

“In the last three months, we’ve gone from an environment where DeFi was expensive to use and a little bit slow, to now, [where] for a lot of people it’s prohibitively expensive.”

Ethereum fees have spiked nearly 100% over the past 24 hours as congestion saw transaction expenses smash the previous high of $3.27. 

Ethereum transactions fees, 3-month chart

Ethereum transactions fees, 3-month chart: BitInfoCharts

While the average Ethereum transaction fee is more than the daily income in many countries, the additional smart contract executions needed to engage with DeFi protocols has seen users report fees of up to $100.

Major roadblock to growth

The rush to stake coins in the doomed YAM protocol saw numerous SNX stakers report transaction fees as high as $99 when seeking to collect weekly participation rewards. Reddit user Willy 3380 posted:

“To require a transaction fee of 99 dollars is beyond ridiculous. This will be a major roadblock to growth if someone on the team does not address this.”

To mitigate the exorbitant fees, Warwick revealed that Synthetix will launch the Optimism Virtual Machine (OVM) Ethereum layer two scaling solution sooner than previously planned. Already trialled on testnet earlier this year the L2 solution also enables a couple of thousand of transactions per second, rather than the current handful of TPS:  

“We’re focused on the OVM and I think it’ll be sooner than ‘three to six months’ to be honest. I think we’ll be transitioning faster than that because it’s probably one of the top-three things we need to nail.”

The solution theoretically works with any Ethereum smart contract.

Opportunity to dethrone Ethereum

Layer 2 solutions for Ethereum’s congestion problem are becoming increasingly important due to delays in the roll out of ETH 2.0. Messari’s head of product Qiao Wang asserted that Ethereum may face aggressive competition from rival scalable blockchains:

“I’ve changed my mind after using a dozen of Defi platforms. So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.”



Source link

- Advertisement -
Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
474FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,550FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.17
GBP
1.29
CHF
1.09
NOK
0.11
JPY
0.01
CAD
0.75
AUD
0.72

Most Popular

BuySellVouchers Indirectly Gives the Opportunity To Shop in the Popular Retail Chains With Bitcoin

It is looking like good times in the retail industry as BuySellVouchers gives a solution that allows users of the platform to shop...

Canadian Firm 3iQ’s Bitcoin Fund Listed on Gibraltar Stock Exchange

The Gibraltar Stock Exchange said Tuesday that it listed a new bitcoin fund belonging to 3iQ Corp, a Canadian investment fund manager...

Chainalysis and Texas firm win million-dollar IRS contract to crack Monero

On Wednesday, the IRS awarded two $625,000 contracts looking for tracing tools for privacy token Monero and Layer 2 protocols. The winners were...

GET update September ’20 — Non Fungible Tickets | by Olivier Biggs | GET Protocol | Sep, 2020

To the best of our knowledge we have never been accused of having too little information in our blogs, and we don’t expect...
bitcoin
Bitcoin (BTC) $ 10,763.05
ethereum
Ethereum (ETH) $ 356.95
ripple
XRP (XRP) $ 0.241408
tether
Tether (USDT) $ 1.00
bitcoin-cash
Bitcoin Cash (BCH) $ 228.75
bitcoin-cash-sv
Bitcoin SV (BSV) $ 178.37
litecoin
Litecoin (LTC) $ 46.25
eos
EOS (EOS) $ 2.58
binancecoin
Binance Coin (BNB) $ 28.99
okb
OKB (OKB) $ 6.13
tezos
Tezos (XTZ) $ 2.21
leo-token
LEO Token (LEO) $ 1.26
cardano
Cardano (ADA) $ 0.100477
monero
Monero (XMR) $ 100.62
stellar
Stellar (XLM) $ 0.073253
chainlink
Chainlink (LINK) $ 9.89
huobi-token
Huobi Token (HT) $ 4.63
tron
TRON (TRX) $ 0.026334
usd-coin
USD Coin (USDC) $ 0.999716
dash
Dash (DASH) $ 67.96
neo
NEO (NEO) $ 19.08
iota
IOTA (MIOTA) $ 0.279624
nem
NEM (XEM) $ 0.116692
zcash
Zcash (ZEC) $ 61.48
maker
Maker (MKR) $ 545.66
paxos-standard
Paxos Standard (PAX) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 5.41
vechain
VeChain (VET) $ 0.013226
true-usd
TrueUSD (TUSD) $ 1.00
ftx-token
FTX Token (FTT) $ 3.64
kucoin-shares
KuCoin Shares (KCS) $ 0.869271
waves
Waves (WAVES) $ 2.48