Gas Prices
Note: Data in this section last updated July 3rd, 2022
“Gas” refers to the fee required to execute a transaction on the Ethereum network. Whether you want to transfer a token, loan your assets on Ethereum, mint an NFT or cast your DAO vote, you must pay gas to incentive the miners to approve your transaction and include it on the blockchain.
Because space on the Ethereum network is limited – it can only execute around 15 transactions per second – priority is determined by an auction process. This means that gas can get very expensive when the network is busy.
Unfortunately, network usage has grown significantly over the last few years, which has caused fees to spike. While we are in a bit of a lull at the time of writing, the 200-Day Moving Average transaction fee remains close to $20.00, a substantial increase from the $0.12 recorded three years prior.
Average Ethereum Gas Fees Have Increased Over 150x in the Last Three Years
Keep in mind these are average fees – in times of extreme congestion it is not uncommon for fees to spike into the hundreds or thousands of dollars. The most notable example of this occurred during the Bored Ape Yacht Club’s April 30th launch of Otherside, where users had to pay a minimum of $6K in fees to execute a transaction!
This is a significant problem for DAOs that choose to use on-chain governance, as users are unlikely to want to pay $25+ to record a simple vote.
As discussed previously, that’s why many DAOs are moving to off-chain voting systems and others are considering transferring to a lower cost blockchain such as Solana or Polygon.
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