As Ethereum gears up for its second iteration in Ethereum 2.0, it is seeing increased interest which has helped skyrocket the price to fresh all time highs of $1,750. This is great news for investors and holders of the ETH token, but the project is not aimed at being a speculator’s dream.
Ethereum aims to be a world computer which is viable and functional across an entire globe of network users, however, as it stands the pricing and fees for using the chain are also tapping new heights.
Growth in the DeFi space and Ethereum’s role there have also seen increased volume which is bringing with it these outlandish fees, leading some to call it a crisis for Ethereum.
Ethereum’s growing price seems to be driven by the growth of DeFi — also spurred on by the recent trading situation with RobinHood and WallStreetBets — but it is also snowballing as a an investable asset due to the launch of dedicated futures from CME Group and asset management giant Grayscale buying ETH for its Ether Trust again this week after a near two-month break.
The new heights in price have been matched in transaction fees to a point where some exchanges were forced to halt ETH withdrawals altogether.
“This is a legit crisis. Going to have to stock up on popcorn to see how Ethereum digs its way out of this,” Blockstream developer Grubles commented.
According to data from YCharts, the average ETH fee was $23.27 on Thursday.
Need for a change
The role of Gas fees in Ethereum’s progression to be a World Computer have long been spoken about. In general, as a Proof-of-Work token, the coin has lacked the performance needed to handle huge volume, and this has been pointed out on many occasions.
Ethereum is looking to address this with its move to ETH 2.0, but the progress has been slow thus far. As another instance of Ethereum becoming almost unusable emerges and a true solution is still a long way off, the project might run into more push back going forward.