Transaction fees on the Ethereum network have skyrocketed as of late, with fees increasing over 7000% as the network becomes clogged with various large-scale airdrops.
The minimum safe transfer fee has increased to $0.5-$0.8 from $0.01 on ETH Gas Station, a widely used Ethereum fee estimator, at the time of writing. The transaction fee has dropped from a peak of $1 – which would have made for a 10000% increase in fees for all Ethereum transfers.
A sudden network clog can cause for inconsistent processing – which means that transactions can see no movement for hours if not picked up by a miner, even if they are within the “safety bounds” of 40-80 Gwei per transaction. Binance has increased its transaction fee for all outgoing transactions to 180 Gwei, which translates to approximately $1.78 paid per transaction (and higher for ERC20 transactions), to ensure timely withdrawals, which eclipses Bitcoin’s median transaction fee of $1.55.
According to ETH Gas Station, the majority of high-gas transactions originate from airdrop issuers, which are essentially addresses that send tokens en masse to other addresses holding ETH. Airdrops have increased in popularity – though meant to increase holder diversity, they are often used to advertise ICOs as well. Recently, however, FCoin (a new exchange) has encouraged an airdrop competition through its listing mechanism, where ERC20s with the highest amount of holders will get listed on the exchange. This has created an arms race of sorts between the competitors – which has pushed gas prices extremely high as these addresses aim to send the most amount of tokens in a brief amount of time. Some of the airdrops have used over 300 Gwei per transactions, in an effort to outbid and push other airdrops and normal transactions off the next block.
Though this network congestion is expected to be short-lived, it also highlights Ethereum’s scaling bottleneck that nearly all public and decentralized blockchains experience. Unlike Bitcoin, Ethereum’s gas limit (the amount of data that can be stored in each block) is dynamic, and can be modified through miner consensus, allowing for more transactions per second, however this has many issues associated with it like blockchain bloat and decreased security, and is typically not changed.
Ethereum’s developers are currently working on a scaling solution that would bring about both sharding and proof of stake in a single update, which is expected to greatly increase the transactions per second Ethereum is capable of. Second-layer scaling solutions like Loom and Plasma are expected to boost Ethereum’s tx/sec even higher, escaping the limits on on-chain settlement.
Source link: https://chainstate.org/2018/07/02/ethereum-transaction-fees-increase-by-7000/