DeFi Boom: Coinbase Passes Transaction Fees onto Pro Users as ETH Gas Price Hits $1 million

September 18, 2020 3:34 PM UTC

Since the start of 2020, Ethereum transactional gas is consistently increasing. Miners on the Ethereum blockchain have achieved a new milestone by earning 2,275 ETH ($880K) per hour, a five-year record. 

The launch of the UNI governance token mainly kicked off the spike. Following the Uniswap announcement, over 70,000 users raced to claim free UNI tokens. The highly elevated interest for UNI slows down the Ethereum Network. As per the analysis, the network’s overall gas fees surpass the previous 700 Gwei targets.

Although miners are endorsing record revenues, constantly growing miner’s achievement has been raising concerns in the Ethereum community. Glassnode, a crypto analytics firm, published a report on Twitter:

“Following Uniswap Protocol’s announcement of the $UNI token today, #Ethereum saw a massive surge in miner fees. Almost $1M USD in fees were spent in a single hour!”

Coinbase Pro Ask Users to Pay Transactional Fees

As Ethereum transaction gas is continually growing, the US-based exchange Coinbase Pro announced that users have to pay withdrawal fees according to the network transaction fee. Earlier, Coinbase Pro had managed all transaction fees on behalf of its users. 

Coinbase said on its website,” to ensure a smooth experience for our customers and reasonable transaction processing times, Coinbase Pro will charge a fee based on our estimate of the network transaction fees that we anticipate paying for each transaction. In certain circumstances, the fee that Coinbase Pro pays may differ from that estimate. All fees we charge will be disclosed at the time of your transaction.” 

Three Arrows Capital co-founder Su Zhu said the massive jump of fees has made the network inconvenient, “Ethereum gas fees ruin Defi for normal users”.

While pointing to growing transaction fees of the network, Vitalik Buterin, co-founder of Ethereum, said that Ethereum users should be utilizing a layer-2 scaling solution to resolve the matter.

“To those replying with “gas fees are too high”, my answer to that is “well then more people should be accepting payments directly through zksync/loopring/OMG”. Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to… use it,” he said.

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