Buterin, Ethereum Developers Focus on Congestion as Fees Spike Over 600% in 1 Month

Median fees have spiked nearly 900% since Aug. 2.

AccessTimeIconSep 3, 2020 at 2:45 p.m. UTC
Updated Mar 6, 2023 at 3:10 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Ethereum developers are turning their focus back to the current version of the network after months of focus on the upcoming Ethereum 2.0 release to address exponential fee growth.

  • The surge in fees is being driven by the explosive popularity of decentralized finance (DeFi) applications that are predominantly built on Ethereum.
  • Average network fees reached $15.21 on Wednesday, up 660% from $2 a month ago. Ethereum's median fees also spiked nearly 900% over the same period, reaching $8.95.
  • Moreover, the day after CoinDesk reported about new record highs Tuesday for transaction costs, average fees climbed another 24% and median fees spiked 37 percent. 
  • In a bid to ameliorate soaring fees, Ethereum co-founder Vitalik Buterin released his Ethereum Improvement Proposal (EIP) 2929 Tuesday that proposes making certain heavy contracts more expensive by a factor of three. Contracts affected would be those that update the Ethereum state, including some applications.
  • This repricing proposal could break some smart contracts already operating on Ethereum, Buterin wrote. He added that developers “have had years of warning” about potential changes.
  • Approving this proposal, however, requires consensus from the Ethereum community, a process that can take weeks or months. Other broad-brush scaling solutions like EIP 1559 or sharding remain on the distant horizon as well.
  • For now, individual developers need to incorporate their own individual scaling solutions, said Hendrik Hofstadt, founder of staking firm Certus Oneit, in an email with CoinDesk. “I think the pain is now big enough to push the people to move quicker with L2 (layer 2) solutions,” he added.
  • Tether, for example, announced its intention to explore zk-rollups for settling tether (USDT) transactions on the Ethereum blockchain Tuesday. The stablecoin’s transaction on Ethereum consumes the second largest amount of fees, just behind the wildly popular decentralized exchange Uniswap.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.