Who will save the congested Ethereum and high gas fees?
Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: ANTÓNIO MADEIRA, reprinted with authorization by Odaily.
Editor's Note: This article comes from
Cointelegraph Chinese (ID: CointelegraphChina)
Cointelegraph Chinese (ID: CointelegraphChina)
, Author: ANTÓNIO MADEIRA, reprinted with authorization by Odaily.
Transaction fees on the Ethereum network recently reached new hourly records. As Ethereum (ETH) rallied, miners on the network made more than $500,000 in just one hour, according to on-chain analytics firm Glassnode.
Ethereum is currently sitting at a 2020 high of $486, up 10% yesterday. The surge in network activity is believed to be related to the launch of Sushiswap, a Uniswap fork that saw $1 billion in total value locked in less than 24 hours.
However, it points to a growing problem regarding the sustainability of Ethereum in the short and long term. While DeFi appears to be causing Ethereum’s new bull run, it also appears to be the main cause of its technical problems.
As the decentralized finance space continues to push activity beyond the network’s confines, congestion on the network leads to high numbers of unconfirmed transactions, longer wait times, and higher fees as users compete to confirm transactions faster. This problem also makes some smart contracts almost unusable, which is an extremely critical problem for Ethereum as a smart contract platform in the future.
While Tether (USDT) has been the largest gas spender on the network, decentralized exchange and liquidity protocol Uniswap recently surpassed Tether as the most gas-consuming smart contract.
Uniswap’s daily trading volume surpassed that of Coinbase, which also caused a media sensation, showing that DeFi’s influence in the digital asset field is becoming very large.
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Ethereum has always had problems with high fees and congestion. Recently, the ethereum network increased the maximum gas limit per block from 10 million to 12.5 million, but this is not the only network whose fees have gone up.
Bitcoin’s transaction fee price has also risen sharply from less than $1 in July to $3.53 at the time of writing. The Bitcoin network peaked on August 6 with an average transaction of $6.47.
However, these fees are insignificant for transactions of large sums, such as a user who transfers more than $1 billion worth of bitcoin for less than $5. However, when it comes to micropayments, current fees (on Ethereum and Bitcoin) are simply prohibitive. The nature of transaction fees has become one of the main arguments for classifying Bitcoin as "digital gold" rather than a currency.
While transaction fees have always been an issue on Ethereum, there are a few solutions in play, including an old Ethereum improvement proposal EIP 1559, which is now implemented in Filecoin (a decentralized file sharing and payment protocol) in the test. The proposal has been successful in improving the platform’s fee structure and could theoretically be applied to ethereum as well.
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Ethereum 2.0 and layer 2 selection
At the same time some solutions, such as EPI 1559 or even the upcoming Ethereum 2.0. The upgrade is still being developed and tested, and there are currently layer 2 solutions that can help with Ethereum’s fee issues.
Several layer 2 solutions offer an option for simple payments on the web, many of which are already in use. Most notable is the OMG network, on which a Tether migration has recently occurred to allow for cheaper USDT transfers.
