- The DeFi craze has caused the average Ethereum transaction fee to treble since the start of the year
- Average gas fee has gone from 10.9 Gwei to 32 Gwei in the first half of the year
- The last time Ethereum levels were this high for a consistent period was during the bull run of 2017
The DeFi cryptocurrency craze may have been beneficial for a number of people, with yield farming and traditional trading of DeFi tokens making money for thousands, but it is having a negative impact on Ethereum gas prices which have trebled in recent weeks. This price rise once more calls into question Ethereum’s ability to scale successfully and highlights the need for Ethereum 2.0 even more.
Average Ethereum Transaction Jumps From 10.9 to 32 Gwei
The average daily Ethereum gas price at the start of the year was 10.9 Gwei, rising slightly to 13.4 in March and April (excluding the two sudden anomalous spikes in March). This rise is nothing in comparison to what has happened in May and June however which has seen the average shoot up to 32 Gwei (excluding the two enormous Ethereum transaction fees paid two weeks ago as a result of a Korean ponzi scheme being blackmailed).
This threefold rise, which represents the highest consistent fees since in two and a half years, can be laid squarely at the feet of the DeFi craze, and in particular the amounts of ETH being sent to DeFi projects for yield farming and other such methods of earning ETH.
DeFi Craze Brings Back Memories of Cryptokitties
The last time Ethereum transaction fees were consistently this high was during the cryptoucrrency bull run of 2017 at a time when ICO contributors were having to engage in ‘gas wars’ to get their contributions in, hiking their gas fees to the max in order to have a chance of getting through. This was also at a time when the Cryptokitties trend was taking off, clogging up an Ethereum network that couldn’t cope with the demands on it.
The fact that the average gas price is now as high as it was back then illustrates two things – DeFi is more popular than anyone could have predicted, and the Ethereum network badly needs to scale if it is going to have any chance of survival during the next bull run.