Alejandro ArriecheThe creator of the smart contracts network Ethereum, Vitalik Buterin, recently stated that layer-2 transaction fees under 5 cents within this blockchain may be considered “truly acceptable” in response to a tweet that showcased the gas fees charged by different platforms powered by ETH.
This response comes only days after the launch of the Otherside metaverse from Yuga Labs – the creators of the Bored Ape Yacht Club (BAYC) NFT project – produced significant congestion on the Ethereum mainnet and pushed gas fees to levels that made the minting quite expensive for users.
According to data from Etherscan.io, the average gas price on Sunday 1 rose to 474.57 gwei although the highest recorded price during the day stood at nearly 79,000 gwei – the equivalent to around $0.22 based on the price of ETH back then.
As a result, the average transaction fee rose to $25 according to data from the same website on that same day. Users reported that they had to pay around 1 to 3 ETH to mint their Otherside non-fungible tokens (NFTs) with some crypto analysts deeming the auction as one of the most expensive on record in this up-and-coming market.
“This has been the largest NFT mint in history by several multiple, and yet the gas used during the mint shows that demand far exceeded anyone’s wildest expectations. The scale of this mint was so large that Etherscan crashed”, stated Yuga Labs in a tweet released shortly after the auction was completed.
“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale”, the developing team added.
Ethereum Keeps Getting a Bad Reputation for Being Expensive
According to the tweet to which Buterin responded, L2 fees in the Ethereum (ETH) network should be low enough to attract developers and users to rely on this popular blockchain for their transactions and decentralized apps (dApps).
Many proposals have been implemented by the developing team to increase transaction speeds and reduce costs but none appear to have been effective enough – or at least that is what was evidenced in this recent incident with Yuga Labs.
Recently, a proposal was drafted to implement a new danksharding scheme that seeks to reduce congestion by introducing smaller data sets that can lead to faster processing speeds. This proposal is known as the EIP-4844.
Proto-danksharding, as the proposal is called, is a simplified scheme to the current sharding method used by the network that creates a new type of transaction known as a “blob-carrying transaction”. These transactions are exactly the same as traditional ones except for the fact that they carry an extra piece of data called a “blob”.
According to the proposal’s FAQs: “Because validators and clients still have to download full blob contents, data bandwidth in proto-danksharding is targeted to 1 MB per slot instead of the full 16 MB”.
The implementation of this proposal could have a dramatic effect on the network’s efficiency and transaction costs for both the mainnet and layer-two protocols.
Despite the incident with the Yuga Labs auction, the price of Ethereum remains on an uptrend from a technical standpoint as it has made both higher highs and higher lows in the past three months after finding a bottom at around $2,150 per coin back in January.
That said, the price remains below its 200-day simple moving average while its momentum indicators are standing in negative territory with the Relative Strength Index (RSI) sitting at 44 while the MACD has drifted to negative territory while staying below the signal line.
Crypto assets are highly volatile unregulated assets. Your capital is at risk.
This article was written for Business 2 Community by Alejandro Arrieche.
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