Ethereum Transaction Fees Hit ATH around $65 on Average

Ethereum (ETH) transaction fees recorded the highest figure since the network’s inception, partially fueled by the huge demand for Dogecoin and other similar coins on different exchanges. Notably, ETH gas hit an average of $65.51 per transaction as the asset rallied above $4,300 while its market capitalization topped half a trillion.

Such scenes are expected to continue on the Ethereum ecosystem as the network congestion hits an all-time high until Eth 2.0 is fully implemented. Swapping an ERC20 token with another on the Ethereum ecosystem has in the recent past recorded insane fees that make the venture unprofitable.

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

Ethereum Transaction Fees and the Cryptocurrency Market

Recently, Binance announced that it has listed Dogecoin doppelgänger Shiba Inu (SHIB) that has rallied over 26132% in the past 30 days. Apparently, Binance temporarily ran out of Ethereum for exchange purposes due to the high demand in Shiba Inu. An incidence that has never been reported with any other ERC20 token.

Despite the high fees, institutional investors are still interested in Ethereum based on future growth prospects. According to daily updates from Grayscale, the Grayscale Ethereum Trust has a total asset under management of approximately $12.48 billion.

Furthermore, the asset continued to rally further leading to top altcoins. Notably, the asset was trading around $4,322.75, up approximately 9.84% according to Binance-backed Coinmarketcap. Additionally, the asset had a market capitalization of $501,098,102,757, thus a market dominance of approximately 19.7%, while BTC had a market dominance of around 42%.

There are 115,839,662.25 ETH in circulating supply with an infinite supply. However, the ecosystem is moving away from the proof of work concept to the proof of stake concept that will mean more Eth staked to ensure the system’s security and also governance.

In order for one to take part in Ethereum staking, one is expected to deposit 32 units of Eth worth approximately $138,000. The Beacon Chain that runs on a proof of stake led by validators is expected to help with the high Ethereum transaction fees currently choking the market.

Meanwhile, there has been a notable migration of major Defi projects from the Ethereum ecosystem to other cheaper and scalable networks like Binance Smart Chain. Should the transaction cost scale higher, more Defi projects are expected to shift their base to other better alternatives to keep up with the high demand and future scalability.