While the value of Ether (ETH) has continued to show increasing signs of stabilization around the $ 1800 range over the last two weeks or so, users of the main altcoin network have faced rising gas charges as well as network load issues. In comparison, Ethereum fees have more than doubled since last summer, when the DeFi boom began to peak.
Although this increase in commission is directly linked to the increase in the value of ETH, it cannot be denied that it also shows an increased demand for ERC-20 tokens and stable coins, as well as many proposals based on decentralized financing in general.
As you can see from the chart below, the cost of facilitating transactions in the Ethereum network has increased significantly in recent months, with the average transaction fee reaching a record high of $ 39.49 on February 23rd.
Not only that, on March 20, the average transaction fee was $ 16, which is a pretty high price, especially for developers and those who want to facilitate small transactions.
In addition, as antifouling tokens continue to gain traction, it is logical to assume that transaction costs on the Ethereum network will continue to rise in the near future. Thus, until a viable expansion solution is implemented in the near future, network load and high transaction costs are likely to persist, especially as the NFT sector continues to thrive.
Is the network irreparably broken?
Introduced by Jay Howe, CEO of Cryptocurrency Exchange OKEx, Cointelegraph told Cointelegraph that Ethereum is definitely a tipping point along with other Level 1 solutions, adding: “They need to deal quickly with the increased fees and network load – or risk losing. competitors who can. Offers lower fees and better performance. He also added:
“Ethereum still has the largest developer community and the number of DApps built on top of it, but complacency is still killing.”
And while Hao believed that Ethereum would eventually be able to solve its problems at some point in the future, the crypto community was no longer willing to wait for the completion of the Proof of Stake transition and the completion of Eth2, especially with the growing number by developers and other network users who are beginning to expand their activities. and move to alternative ecosystems.
For example, several platforms have integrated different versions of Tether (USDT) and USD Coin (USDC) – a la Algorand, Tron, so that stable forex traders can make transactions quickly and at a fraction of the cost currently charged by the Ethereum network.
Furthermore, more and more EVM-compatible blockchains – OKExChain, Binance Smart Chain, etc. – are challenging Ethereum’s dominance. “Competition is a healthy lifestyle and forces established operators to perform better and focus on giving users the experience they deserve,” said Howe.
However, Jack O’Holleran, CEO of Skale Labs, a Layer 2 PoS network compatible with Ethereum, believes that the problems of increasing gas charges on the network will be mitigated as the expansion work continues, adding:
“The main network in Ethereum will be a basic level of security and alignment. Scalability levels will be at the top of Ethereum, providing functionality to implement smart contracts and reduce gas charges. We will also see the emergence of application-specific blockages that provide greater price efficiency with more forecast bandwidth. ”
What is Berlin Update?
After months of planning, the Ethereum community has recently prepared an implementation timeline for Berlin, with the update scheduled to go live on the Ethereum network at block 12,244,000, or April 14th. In this context, it should be noted that a total of four Ethereum optimization protocols will be distributed in Berlin.
These include the EIP-2565, which aims to reduce ModExp prefabrication costs, which will help you calculate gas costs; EIP-2929, a proposal that will “increase” some fuel costs; EIP-2718, which introduces a new transaction module; And finally, the EIP-2930, which includes a transaction type with additional access lists.
To make the next transition smoother, Ethereum contract operators were advised to upgrade their business to Berlin-compatible contracts by 7 April. However, switches, wallet service providers and Ether token holders are not required to make any changes to the terminals.