December 9, 2022
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Ethereum’s transaction fees reach historic high

Ethereum’s transaction fees are at an all-time high, around $ 65 on average. Despite the high rates, institutional investors are still interested in Ethereum based on the prospects for future growth.

Ethereum’s transaction fees (ETH) registered the highest value since the beginning of the network, partially fueled by the huge demand for Dogecoin and other similar currencies on different exchanges. Notably, the ETH rate averaged $ 65.51 per transaction, as the asset rose above $ 4,300, while its market capitalization exceeded half a trillion.

Such scenes are expected to continue in the Ethereum ecosystem as network congestion reaches a high point until Eth 2.0 is fully implemented. Exchanging one ERC20 token for another in the Ethereum ecosystem has seen absurd fees in the recent past that make the venture unprofitable.

For example, to put the case in a better perspective, using Trust Wallet to exchange 200 HOT (an ERC20 token) to Ethereum through its decentralized exchange resources, the network fee was around 0.126 Ethereum, approximately $ 546 at the time of the report. Remember that 200 HOT tokens are worth approximately $ 2.58, as the token was trading around $ 0.0129 according to the metrics provided by CoinGecko.

Ethereum transaction fees and the cryptocurrency market

Binance recently announced that it listed the Shiba Inu (SHIB), which has risen by more than 26132% in the past 30 days. Apparently, Binance was temporarily without Ethereum for exchange purposes due to the high demand in Shiba Inu. An incident that has never been reported with any other ERC20 token.

Ethereum’s transaction rates are at an all-time high, yet institutional investors are still interested in Ethereum based on prospects for future growth. According to daily updates from Graycale, the Grayscale Ethereum Trust has a total asset under management of approximately $ 12.48 billion.

In addition, the asset continued to recover, leading to the best altcoins. Notably, the asset was traded at around $ 4,322.75, an increase of approximately 9.84% according to Coinmarketcap. In addition, the asset had a market capitalization of US $ 501,098,102,757, therefore, a market dominance of approximately 19.7%, while BTC had a market dominance of approximately 42%.

There are 115,839,662.25 ETH in circulation with infinite supply. However, the ecosystem is moving away from the concept of proof of work to the concept of proof of stake, which will mean more ethics committed to guarantee the security of the system and also governance.

In order for someone to participate in the Ethereum picket, they are expected to deposit 32 units of Eth in the amount of approximately $ 138,000. The Beacon Chain that works with a proof of participation led by validators is expected to help with Ethereum’s high transaction fees that currently suffocate the market.

In the meantime, there has been a notable migration of important Defiprojects from the Ethereum ecosystem to other cheaper and scalable networks like Binance Smart Chain. If the transaction cost increases, more Defi projects should shift their base to other better alternatives to keep up with high demand and future scalability.

Source: Coinspeaker

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