30 Aug 2021 9:42 AM +00:00

Ethereum Gas Fees At Highest Price Since May As The NFT Renaissance Continues

Ethereum gas fee prices are at their highest for over three months, averaging 121.23 Gwei on August 27 (via Etherscan).

The average transaction fee also spiked, reaching $38.306 on the same day (via BitInfoCharts) - the highest since May 19.

This rise comes after the London hard fork implemented EIP-1559, which was expected to lead to more predictable gas prices

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Ethereum Gas Fees Reach Three-Month High

One of the major drivers of this gas price increase comes from the revived interest in NFTs. OpenSea is responsible for 21.76% of gas consumption in the last 24 hours, totalling fees of $6.07m (1909.84 ETH).

The NFT game Axie Infinity, which has almost 1 million daily players, is the fourth largest gas consumer. It used 3.73% of all gas in the last 24 hours.

However, OpenSea announced in March that it would soon support Immutable X - a Layer 2 solution that offers gas-free minting and trading.

Since reaching its peak of 121.23 Gwei, the average gas price dropped to 100.69 Gwei on August 29. An average transaction cost $30.865. This marks a 110% increase in Ethereum’s transaction fees since August 5 - the date of the London hard fork.

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The hard fork’s EIP-1559 introduced a base fee - a standard gas fee that can increase up to 12.5% depending on the network activity. This base fee is then burned.Users also can ‘tip’ Ethereum miners if they want a higher chance of a faster transaction.

While not intended to reduce gas fees as much as it was to stabilise them, much of Ethereum users’ frustration remains aimed at these high gas prices.

Messari researcher Ryan Watkins noted, for example, that high gas prices could force new cryptocurrency users towards alternative blockchains.

As gas prices remain high, attention turns to the upcoming Ethereum 2.0 upgrade release. Through sharding, Ethereum 2.0 will introduce 64 new chains, dramatically increasing the number of transactions per second. The upgrade could ease the demand on the network and potentially lower Ethereum's gas fees.

Read More: Ethereum Difficulty Bomb Date: When Is The New EIP-3354 Date?

[Image by Jievani Weerasinghe via Unsplash]