Today the gas for Ethereum transactions exceeded 200 Gwei on average.
At the time of writing this article, the average was around 250 Gwei, while the maximum was as high as 300 Gwei.
Recently, the average cost of transactions has risen from less than 20 Gwei at the end of April to more than 30 at the end of May, and then rose again to more than 80 at the end of July, to soar over 100 in recent days.
It is possible that this rise is due in particular to DeFi protocols, which require high levels of use of the Ethereum blockchain. Indeed, they have been increasingly used lately, resulting in an overload of transactions which generates such an increase in costs that in some cases it puts at risk the profits obtained, for example, with trading on DEXs.
Ethereum, Gwei spikes
Excluding the pioneering period of 2015, in the past there have been peaks even higher than 200 Gwei but only rarely, and for very short periods, while what is happening seems to be a congestion that could continue for a long time, since it is not only due to the renewed interest in the price of ETH, but also to the use of DeFi protocols.
In the absence of a short-term solution, considering that it will be necessary to wait for Ethereum 2.0 for a few more months at least, there are opportunities for those protocols that are based on other blockchains, or that have one of their own.
In a scenario like this, only those who can afford to pay high transaction fees will continuously use Ethereum-based tools, and this could prevent decentralized finance from competing with centralized finance.
Ethereum miners, on the other hand, are profiting from this and are seeing an exponential increase in their fee revenues.
These revenues have increased by more than 1,400% this quarter, so much so that Ethereum’s overall mining profits have also outperformed those of Bitcoin.
According to some, there is evidence that Ethereum miners are sending “spam” transactions to the blockchain to keep the level of congestion, which in turn keeps the fees high.
To date, this seems to be considered as one of the main obstacles to be overcome in order to bring decentralized finance to the masses, and it doesn’t even seem easy to solve