High Fees
Note: Data in this section last updated May 28th, 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, 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 $25.00, a substantial increase from the $0.11 recorded three years prior.
Ethereum’s Average Transaction Fee is Close to $25.00
Keep in mind these are average fees for all transactions, including simple ones like an ETH transfer. As NFT transactions are generally much more complex, it is not uncommon to see fees for trading or minting NFTs average several hundred dollars.
In fact, in times of extreme congestion, commonly known as “gas wars”, fees can be in the thousands. 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 purchase land!
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 and Binance Smart Chain – that offer significantly lower fees and transaction times. For this reason, they are often known as “Ethereum Killers”.
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