It’s no secret that Ethereum’s been seeing a massive surge of popularity, particularly its decentralized finance (DeFi) protocols. However, with this massive popularity, a new skyrocket in fees have come. As it stands now, the network had processed an all-time-high of $6.87 million in fees alone just yesterday.
ETH Gas Prices Reaches Unfeasible Levels
Kain Warwick stands as the founder and CEO of Synthetix, a DeFi protocol on Ethereum. Speaking to the press, he warned that these record-high fees could negatively impact DeFi and its growth.
He explained that the DeFi environment had evolved within the past three months. In the past, DeFi was a little slow to use and expensive. Now, however, it’s come to a point where it costs so much that people don’t bother to use it.
Up To $100 In Fees For Smart Contracts
Over the past 24 hours, the fees for Ethereum have seen a massive spike, almost doubling in cost as congestion on the network saw the previous high of $3.27 be smashed passed with ease.
As it stands now, Ethereum’s average transaction fee is more than the daily income in a lot of countries. However, the problem is only increased when it comes to smart contract executions, which is an integral part of DeFi protocols. This has seen users dock out fees of up to $100 just to enact their smart contracts.
With the YAM protocol seeing a massive rush to have coins staked within it, SNX stakers, in particular, had reported transaction fees going as high as $99 when they wanted to collect their weekly participation rewards.
Complaints And Proposed Solutions
A Reddit user, in particular, voiced their grievances about the matter at large. They described the $99 fee as beyond ridiculous, and claimed it would be a significant roadblock for the future of DeFi if this doesn’t get addressed.
As these prices just keep rising, Warwick has recently revealed plans to try and counteract these massive fees. Synthetix will launch the Optimism Virtual Machine, which stands as an Ethereum layer two scaling solution. According to Warwick, this is already being trialed on testnet since earlier this year. This L2 solution will also enable several thousands of transactions every second (TPS), which will be a stark contrast of the handful of TPS currently happening now.
As it stands now, the solution can theoretically work on any Ethereum smart contract, which might just be what the DeFi industry needs to keep itself going.