The Ethereum network has now had higher average transaction fees than the Bitcoin network for 2 months. The blockchain fees are one of the biggest challenges. Ethereum users and investors are wondering when the solution will come? – Among other things, this involves an improvement proposal called EIP-1559.
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DeFi and the Ethereum fees
Especially the use and hype around Decentralized Finance (DeFi) has pushed the Ethereum network to its limits. Countless transactions have led to the fact that not only transactions themselves were carried out slowly, but above all, they also had high fees.
A recent tweet from the analysis company Messari on October 8th showed that the longest period of time has now been reached where Ethereum fees are higher than Bitcoin fees.
”Ethereum fees have been higher than Bitcoin fees for 2 months straight. It’s longest streak ever.”
Especially in August, at the absolute high of DeFi, the Ethereum fees reached their all-time high. Due to the cooling off from the DeFi market, however, the situation has calmed down considerably to this day.
In absolute terms, this means that the Ethereum fees are currently around $2, while the average fee in August-September was around $14.
EIP-1559 and the question of a solution
Ethereum 2.0: This buzzword has been circulating in the crypto space for several months and years now. It refers to the final solution of the scaling debate and problems of Ethereum. However, until this is actually implemented, another 2 years will probably pass.
Therefore the question arises how to find a good interim solution. In other words: Are there ways to solve the problems with the fees quickly and satisfactorily?
Last week, ConsenSys developer Tim Beiko published the findings of a survey on Ethereum Improvement Proposal 1559.
At the core of this EIP is the idea of implementing a fixed network fee per block and additionally using a “tip” for miners. A part of the fees would again be burned depending on the congestion level of the blockchain.
The survey showed that the majority (60%) supports the project. The remaining 40% are divided into 27% who have a neutral opinion and 13% who reject the project. Logically, it is especially the miners who are critical of the EIP-1559.
DeFi Space suffers a severe slump
Decentralized Finance (DeFi) continues to struggle with declines and losses. After the sharp rise in recent months, the overheated market is gradually discharging. The analysis company Santiment found that on Wednesday the day before yesterday alone, the market capitalization of all DeFi tokens collapsed by 25%.
In a blog post published on October 8th, analyst company Santiment estimated that the daily trading volume of all DeFi tokens has decreased by 30% in the past 7 days. The big market leaders such as Uniswap (UNI), Yearn Finance (YFI) or Compound (COMP) are particularly hard hit.
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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