Gas exceeds the standard, Ethereum is in a hurry
Editor’s note: This article is from Honeycomb Finance News (ID: fengchao-caijing), author: Kyle, reprinted by Odaily with authorization.
In the past two months, a new round of DeFi boom has surged, and the congestion on the Ethereum chain has intensified. The Gas fee consumed for a transaction on Uniswap has reached more than 20 to 200 US dollars.
On February 28, data from Okey Cloud Chain showed that the number of unconfirmed transactions on the Ethereum network reached 106,800, and a transaction on Uniswap requires a gas fee of about 0.013ETH, which is about 20 US dollars, equivalent to 130 yuan.
On that day, ETH fell to $1330, which made the gas fee level much lower than a few days ago. On February 23, the average daily gas fee of Ethereum reached 431.97Gwei, the highest point of the year. On the same day, the gas fee required for a transaction on Uniswap exceeded 200 US dollars.
Ethereum is in a bind. The expansion of DeFi applications is good for Ethereum, driving up the price of the underlying Token ETH, and a high ETH price will exacerbate the increase in Gas fees, which in turn restricts the development of applications. In the past week, the total lock-up value of the Ethereum DeFi protocol dropped from US$55.3 billion to US$46.5 billion, a decrease of 15.9%. The 24H trading volume of all Ethereum DEXs dropped by more than half from US$5.059 billion to US$2.139 billion within 5 days.
HuobiHuobiThe BSC and Heco chains launched separately took advantage of the trend and took over part of the funds lost by Ethereum. The data shows that on February 28, the 24H trading volume of the decentralized exchange MDEX on the Heco chain reached 3.224 billion US dollars, exceeding the sum of all DEX trading volumes of Ethereum on that day. PancakeSwap on BSC leads Uniswap with a 24H transaction volume of $875 million.
The "exceeding standard" Gas fee has become a problem that cannot be ignored in Ethereum, and many users put their solutions on the EIP-1559 proposal. This proposal was proposed by Vitalik, the founder of Ethereum, in 2018. One of the important directions is to establish an algorithmic fee model. Replace the current auction mechanism of "the higher the gas fee, the earlier it will be packaged by the miners" with the fee mechanism of "basic fee + tip". Some ethereum developers believe this will reduce fees on the ethereum network.
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Gas fees remain high and data on the Ethereum chain declines
The high gas fee is becoming the first resistance to the ecological development of Ethereum.
In August last year, in the first wave of the Ethereum DeFi outbreak, a transaction on Uniswap cost about 3 to 10 US dollars in gas fees. In the past two months, a new round of DeFi boom has surged, and the Ethereum chain Congestion has intensified, and the gas fee consumed for a transaction on Uniswap has reached more than 20 to 200 US dollars.
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The average daily gas fee of Ethereum has continued to rise in recent months
The high gas fee of Ethereum is not only caused by the congestion on the chain, but also related to the increase of the price of Ethereum. On September 2, 2020, the average daily Gas fee of Ethereum reached 514 Gwei, the highest point since 2017. But the price of ETH at that time was $480, and the gas fee was not as exaggerated as it is now.
Since the gas consumed in transferring, trading or calling smart contracts on Ethereum is ETH rather than stable coins such as USDT, the increase in the price of ETH will inevitably lead to an increase in gas fees. Although in recent days, the entire encrypted asset market has begun to pull back, and the price of ETH has dropped from $2,040 to $1,330, but even the low price has nearly tripled the price of ETH at the peak of DeFi last year.
There are voices in the market saying that the rising price of Ethereum is hindering the ecological development of Ethereum on the chain. Before the performance problem is solved, Ethereum seems to be caught in an insoluble contradiction: the accelerated development of DeFi on the chain will push up the price of ETH, and the rise of ETH price will lead to an increase in Gas fees, which will hit users Active participation in applications on the Ethereum chain. In the face of high gas fees, traffic will flee with funds.
The overall decline in the data on the Ethereum chain is confirming this judgment, not to mention facing the disadvantages of the big market.
Ethereum
EthereumTVL's top ten projects all suffered capital loss
Except for WBTC, which is a synthetic asset anchored to BTC, all the projects with TVL ranking in the top ten suffered a loss of funds within 7 days, and the TVL of most projects shrank by more than 20%.
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The public chain of the exchange shares Ethereum's hope that EIP-1559 will get out of trouble
The Ethereum Gas fee "exceeded the standard", which means that applications that require high-frequency transfers on the chain have been greatly impacted. Undoubtedly, decentralized exchanges (DEX) such as Uniswap bear the brunt.
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Huobi
at this time,HuobiThe ecological chain Heco and the Binance Smart Chain BSC took part of the cake of Ethereum during this period due to the lower gas fee and faster transfer speed.
On February 28, the data of MDEX, the largest decentralized exchange in the Heco chain, showed that its 24H trading volume reached 3.224 billion US dollars, and the trading volume of a single DEX exceeded the sum of all DEX trading volumes of Ethereum on that day.
According to the data of DeFiBox, in the past week, the total lock-up value of the agreement on the Heco chain has continued to rise, from 5.1 billion US dollars on February 22 to 6.22 billion US dollars on February 28.
The largest DEX on BSC, PancakeSwap, had a 24H trading volume of US$875 million on February 28, which also exceeded the 24H trading volume of US$789 million on Uniswap that day. On that day, the TVL of the DeFi protocol on BSC was US$8.317 billion, an increase of 909% from US$8.24 at the beginning of the month.
During the period of high gas fees in Ethereum, the blockchain network launched by the exchange took over part of the funds flowing out of Ethereum, and the status of the king of the Ethereum public chain was shaken.
There is no doubt that the high gas fee has become a problem that Ethereum must solve. But at this time, Ethereum 2.0 is in the early stage of research and development, and the complete transformation of the PoS mechanism is still far away. The Ethereum community and developers can only make improvements based on the existing framework.
On February 27, Vitalik, the founder of Ethereum, initiated the EIP-3298 proposal. The content of the proposal is to remove the rule "SELFDESTRUCT (self-destruct) contracts can get gas fee refund rewards" in the London upgrade.
Previously, in order to shrink the state of Ethereum (the collection of contracts and address information stored by nodes), thereby reducing the level of Gas fees, Ethereum supports users to destroy contracts and return a portion of Gas fees as rewards. But in reality, some developers store Gas in the contract when the Gas fee is low, and execute "SELFDESTRUCT" for arbitrage when the Gas fee is high, which actually intensifies the network expansion. Therefore, Vitalik launched a proposal to remove this rule to "unclog" the network.
At present, the charging model for transactions on the Ethereum chain is an auction mechanism. Users bid for gas fees, and miners choose the one with the highest bid for priority packaging. This mechanism has largely pushed up the price of gas fees. In the algorithmic fee model, users no longer need to manually set the gas fee, and wallets compatible with EIP-1559 will automatically set the transfer fee. This fee consists of a basic fee and a tip. The basic fee will be destroyed and miners cannot get it, and the tip will be used as a reward for miners. In addition, in EIP-1559, there is also a design to dynamically scale the block size to reduce network congestion.
At present, the charging model for transactions on the Ethereum chain is an auction mechanism. Users bid for gas fees, and miners choose the one with the highest bid for priority packaging. This mechanism has largely pushed up the price of gas fees. In the algorithmic fee model, users no longer need to manually set the gas fee, and wallets compatible with EIP-1559 will automatically set the transfer fee. This fee consists of a basic fee and a tip. The basic fee will be destroyed and miners cannot get it, and the tip will be used as a reward for miners. In addition, in EIP-1559, there is also a design to dynamically scale the block size to reduce network congestion.
Not long ago, EthHub co-founder Eric Conner revealed that EIP-1559 will be implemented this year, followed by the destruction of a lot of ETH. However, because this proposal harms the interests of miners, EIP-1559 has been resisted by many Ethereum miners and mining pools.
In recent days, Ethereum mining pools such as Xinghuo Mining Pool and Bee Mining Pool have publicly opposed EIP-1559. On February 27, according to statistics from overseas netizens, 13 mining pools opposed EIP-1559, and their computing power accounted for the entire network. 63% of the total. Of course there are supporters. On February 26, Yuchi published an article titled "Standing on the Right Side of History: EIP-1559", expressing its support for the EIP-1559 proposal.
At present, there are huge differences on EIP-1559, and whether the proposal will be officially implemented has not yet been determined. However, most users and developers regard EIP-1559 as the key to Ethereum's escape.
"It's time to make some changes." An Ethereum user said on social media that he was fed up with paying hundreds of dollars in gas fees for a transaction. If this problem cannot be resolved within a year, the status of Ethereum will be reduced. will decline severely.
