Amid Ethereum price rally, transactional fees on the network once again soared to record highs. According to crypto metrics platform Blockchair, Ethereum average transaction fees are now standing at $23.
Gas fees climb up as demand on the Ethereum network rises. Some analysts believe that the DeFi boom has pushed a massive wave of activity on the Ethereum blockchain. However, the growing fees are making use of DeFi apps more expensive. Based on the reports, simple swaps using Uniswap and SushiSwap cost almost $40 to $75.
The growing price of ETH has mainly caused the spike in transaction fees. According to data from CoinMarketCap, ETH smashed another milestone by surpassing $1,688. Gnosis CEO Martin Köppelmann said, “Transaction fee volume on the Ethereum chain is reflective of a wide range of activities—from buying and selling of the ETH token itself to the infrastructure it provides.”
Ethereum Miners are Profiting from Transaction Fees
Miners on the Ethereum blockchain have achieved a breakthrough by earning $800 million in January. According to data from market reports, Ethereum mining income, almost 40%, came from the network transaction gas fees.
“A staggering $325 million in transaction fees were paid on Ethereum in January, almost doubling the amount of its previous record month (Sept 2020).”
The growing Ethereum’s fees are pushing the use of second-layer scaling solutions ahead of Eth2’s upgrade. Several DeFi protocols are planning optimistic roll-ups to lighten gas prices.