Ethereum gas prices have set new records, with single DeFi transactions costing over $10 in fees. High fees are the result of congestion, as users pay ever higher fees to ensure their transaction gets into a block. As DeFi takes off, the price of gas on Ethereum threatens its future. Or does it?
Is the Party at Vitalik’s House?
Gas on Ethereum can be seen as “block space rent” and many are saying the rent is too damn high. That depends on who you ask, though. Even a $10 fee is a small fraction of many DeFi trades, as speculators are by definition those who have “money to burn.” For the moment at least, DeFi is a market that exists on Ethereum. If you have profitable trades to make on DeFi, then gas is simply another cost of doing business, since there is no other way to make the trade.
A Playground for the Wealthy
DeFi Participants are Actively planning Moves
High Gas Prices Lead to Questions About The Promise of Blockchain
For DeFi, the future looks bright. Even as high gas prices lead to questions about the promise of blockchain, DeFi is forcing the ecosystem to consider new participants who can deliver where Ethereum 2.0 has failed. There are scalable blockchain platforms today that offer solutions where high traffic doesn’t mean high gas prices, where an application that is popular with one set of users doesn’t threaten the viability of another that is delivering critical services to a minority. We are at the start of a major transition in smart contract blockchains. What lies ahead is a future where blockchain technology moves beyond speculation to solve real problems.
Written by Stuart Popejoy
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