So far, the average transaction fee is $ 0.15 or 0.00085 ETH. However, the average transaction fee for May alone is $ 0.29 or 0.00143 ETH, according to CoinMetrics.
The average transaction fee for Ethereum has increased by over 160%. Miners are enjoying higher revenues at the expense of consumers, but this may change in the near future.
Ethereum transactions are more expensive
Ethereum transaction fees increase in May, with the average transaction fee rising to almost $ 0.30 this month.
This is a cause for concern as it makes using the network more expensive.
But there are anomalies in which higher transaction prices prevail. At Synthetix, for example, the average transaction fee for issuing an SNX is $ 7.4 at the time of writing.
The realization of the basic value of Etherium depends on the ability to carry out a transaction through the network without any problems.
Several projects built on the network suffer from reduced transaction volume if user activity declines due to high fees. Decentralized exchanges are able to lose the most, as they need to settle the chain to confirm the transaction.
The reasons for high transaction fees are myriad, but one theory lies in increasing bullish sentiment for all kriptovaluti after the last event of halving Bitcoin . In the previous bear market, many investors had accumulated Tether (USDT) in anticipation of market change.
The time to unfold this side liquidity may have finally come.
Stable coins represent about $ 10.5 billion of the total cryptocurrency market, of which $ 7.3 billion exists on Ethereum.
Since Ethereum is home to most of the volume of stable coins, the mass exodus of stablecoins to more speculative assets such as BTC and ETH may explain the increase in transaction fees.
Miners, proof of bet and scalability
In 2020, miners earn an average of 631 ETH per day from transaction fees. But in May, this average rose to 1,216 ETH – nearly a 2x increase.
While consumers bear the brunt of high transaction fees, miners are excited about the increased revenue.
Vitalik Buterin noted that the current fees earned by the miners are higher than the expected rewards for ETH 2.0. This gives rise to the idea that Etherium is evolving as a fee market, where the demand for block space raises transaction fees.
Scalable innovations, such as optimistic events, try to solve high transaction fees by allowing more transactions to be settled with the same amount of block space.
With improved scalability, miners’ revenue will be the first victim.
To make up for lost profits, Etherium’s networks will have to contend with more users so that they can earn their revenue through more lower-fee transactions rather than multiple high-fee transactions.