High Fees
Note: Data in this section last updated March 13th, 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 or mint an NFT, 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, lately the Ethereum network is always busy, so average gas fees have ballooned across the board.
Keep in mind these are average fees – in times of extreme congestion it’s not uncommon to pay $500+ to perform a complicated action such as mint an NFT.
Unlike in traditional finance, transaction fees are independent of the transaction amount (i.e. it costs the same to send $1 or $1 million), so while this may not effect high-dollar users, it’s effectively crowding the average consumer out of the market.
These high fees have spawned the creation of many alternative blockchains – such as Avalanche, Solana, Cardano, Polkadot, Binance Smart Chain and Terra – that offer significantly lower feeds and transaction times. For this reason, they are often known as “Ethereum Killers”.
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