- The OG blockchain founder said gas fees lower than $0.05 should be the goal
- ETH transactions have been notoriously high since the boom of DeFi projects
- The emergence of the NFT industry has also supposedly added to demand on ETH’s network
- Crypto proponents surmised that the coming upgrade to a Proof-of-Stake consensus could mitigate high transaction fees.
The founder of the Ethereum network, Vitalik Buterin has once again commented on ETH’s infamous transaction costs.
On Tuesday, the founder of Mythos Capital and co-host of the Bankless podcast Ryan Sean Adams opined that ETH transactions have become more cost-effective. Adams tweeted:
Responding to the tweet, Ethereum founder Vitalik Buterin argued that ETH gas fees must go lower for the benefit of the ecosystem.
Vitalik has also previously said that Layer 2 solutions and zero-knowledge technology (ZK Rollups) could be key tools in solving ETH’s exorbitant transaction fees.
DeFi, NFTs, and The Merge On Ethereum
Indeed, the ETH network is one of the largest and oldest blockchains in the crypto space. As of the time of writing this report, Ether is the second-largest cryptocurrency by market cap, eclipsed only by the world’s leading crypto – Bitcoin.
However, since decentralized finance (DeFi) emerged on the network, users have faced an issue – high gas fees. The rise of the non fungible token (NFT) industry has also supposedly contributed to expensive ETH transactions as demand on the network has significantly increased.
When transactions are submitted on Ethereum, thousands of validators or miners verify and confirm the transactions in what is known as a block. These validators receive a fee for their efforts in the form of ‘gas’.
Users can choose to pay higher gas to push transactions through faster and this is a technique commonly employed by NFT minters. Although, failed transactions remain a possibility even if the user opts for higher gas fees.
During the recent Otherside metaverse NFT mint by BAYC creators Yuga labs, demand for ETH’s network skyrockets, and a rush to secure NFTs triggered a gas war. Data from CoinMetrics shows that over $150 million was spent on transaction costs alone.
Users also lost about $4 million in ETH as more than 10,000 transactions failed to go through.
Moving forward, crypto proponents have surmised that Ethereum’s planned upgrade from a proof-of-work blockchain to a proof-of-stake network could finally eliminate high gas fees. Developers have reportedly made progress regarding the much-anticipated Merge event although a definite timeline has not been confirmed yet.