During this period, the price of Ethereum gas has reached peaks that hadn’t been seen for a long time.
Nowadays, it takes a little more than 100 Gwei, i.e. less than 1 US dollar, to confirm a transaction on the Ethereum blockchain, and more than 150, i.e. $1.25, is needed for an immediate transaction.
However, there have been much higher peaks in the past few days, with the average per transaction peaking at 480 Gwei on September 2nd.
As the number of transactions was very high, the total gas spent on the Ethereum network on September 2nd was over 78 million Gwei.
For example, from the beginning of the year until April, the gas hardly exceeded 15 Gwei, while in May it had already exceeded 30 Gwei, and in June it exceeded 40 Gwei. But it was from July that there was a real surge, with the gas rising first to 70 Gwei, and then in August well over 100.
The problem is the number of daily transactions recorded on the Ethereum blockchain, and the relatively high cost of Gwei (1 Gwei = 0.000000001 ETH).
The number of transactions recorded daily on the Ethereum blockchain has been steadily above one billion for several days, with peaks of over 1.2 billion.
It is enough to consider that the highest ever peak recorded on January 4th, 2018 in the middle of the speculative bubble was 1.35 billion transactions, just over the 1.29 billion recorded on August 10th.
Moreover, the price of gas in dollars increased also due to the increase in the price in dollars of ETH, which went from around 240$ in June to over 400$ in August.
Average fees per transaction thus rose to over $14 on September 2nd, from less than $1 in June, although it is now returning to more normal levels.
The fact is that although miners are able to mine blocks at a rate of more than one new block every 15 seconds, the number of transactions that can be entered into each block remains limited, and this sets an upper limit to transactions that can realistically be confirmed every day.
When the number of transactions awaiting confirmation is higher than those that can realistically be included in a block, the miners choose those for which the highest fee is paid, so if the number of transactions awaiting confirmation is particularly high, only those with particularly high fees are chosen.
That is why the huge volume of transactions generated in recent days has led to such a significant increase in fees.
Combined with the increase in the price of Gwei, it is easy to understand why an average cost of $14 per transaction has been reached.
Given the success of DeFi protocols based on the Ethereum blockchain, and the increasing use being made of the USDT ERC-20 tokens, it is likely that phenomena like these will occur again in the future.
However, when Ethereum 2.0, which replaces Proof-of-Work with Proof-of-Stake, is launched, the number of confirmable transactions per day will increase, which will help mitigate the problem.
But it will be necessary to wait until the introduction of Sharding before hoping for a long-term solution that will significantly increase the number of daily transactions that can be confirmed, thus drastically reducing the cost of gas.