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Gas cost of $ 99 in ETH slows down development of DeFi

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Gas cost of $ 99 in ETH slows down the development of DeFi

Gas cost of $ 99 in ETH slows down the development of DeFi
CONTENT

  • The cost of gas in the ETH network has risen to record levels

  • Transaction fees reached $ 100

  • Users are worried about rising gas and transaction costs as it hinders the development of the DeFi market

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Soaring fees on the Ethereum network and rising gas prices to record highs of $ 99 could stall the development of the DeFi marketDecentralized finance (DeFi) is financial services built on blockchain technology that offer users access to an open, efficient and … More.

The downside of popularity

The growing popularity of decentralized finance protocols deployed on the Ethereum platform has contributed to a sharp rise in the cost of fees and gas. On Thursday, August 13, the blockchain processed a record number of transactions of $ 6.87 million.

Gas cost of $ 99 in ETH slows down development of DeFi

Synthetix founder and CEO Kane Warwick warned that high fees are negatively affecting DeFi growth:

“Over the past three months, we have moved from an environment in which DeFi was expensive and a little slow to use today, where it is prohibitively expensive for many people,” he said..

Ethereum fees are up nearly 100% in the last 24 hours. This is due to the catastrophic network congestion and the rapid growth in the number of transactions.

Ethereum Transaction Fee for 3 Months: BitInfoCharts

While the average Ethereum transaction fees exceed daily revenue in many countries, the execution of additional smart contracts required to interact with DeFi protocols has resulted in users reporting fees of up to $ 100.

DeFi Members Outraged by High Commissions

The desire of users to provide as many coins as possible to the DeFi market in exchange for high rewards has led to the fact that the cost of transaction fees soared to an all-time high of $ 99.

Reddit user Willy 3380 wrote:

“To charge a $ 99 transaction fee is ridiculous. This will become a serious obstacle to growth if someone on the team does not solve this problem. “.

In turn, a representative of the Synthetix company said that today a solution for scaling the second level of the Ethereum Virtual Machine (OVM) is being prepared to launch. The L2 solution, already tested on the testnet earlier this year, also allows several thousand transactions per second..

Gas cost of $ 99 in ETH slows down the development of DeFi

Layer 2 solutions to the Ethereum congestion problem are becoming increasingly important due to delays in the deployment of ETH 2.0. Messari’s head of product Qiao Wang argued that Ethereum could face aggressive competition from competing scalable blockchains:

“I changed my mind after using a dozen Defi platforms. Until ETH 2.0 is fully deployed, there is a clear opportunity for a highly scalable blockchain to topple Ethereum. Paying a $ 10 transaction fee and waiting 15 seconds for settlement is just bad UX, “he said on his Twitter page..

As a reminder, BeInCrypto has already reported that fees on the Ethereum network have updated their absolute maximum. On the night from Wednesday to Thursday, the average value of the cost of operations reached 0.018852 ETH ($ 7.38 at the current exchange rate). At the same time, the activity of the Ethereum network approached the indicators of 2017. According to the analytical resource BitInfoCharts, at the end of July the number of daily transactions in Ethereum increased to 1.26 million transactions.

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