The growing popularity of decentralized finance (DeFi) protocols on Ethereum (ETH) has contributed to skyrocketing fees, with the network raising a total of $ 6.87 million in total fees yesterday.
Speaking to Cointelegraph, founder and CEO of Synthetix (SNX), Cain Warwick warned that high fees were affecting DeFi’s growth, stating:
“The last three months we have moved away from an environment where DeFi was expensive to use and a bit slow, so far, [where] for many people it is unnecessarily expensive. ”
Ethereum fees have picked up almost 100% over the past 24 hours, as congestion transaction spending saw its previous high of $ 3.27.
Fees for Ethereum transactions, 3-month chart: BitInfoCharts
Although the average fee of Ethereum transaction is more than the daily income in many countries, the extra smart contract executions required to do with DeFi protocols, users saw fees reported up to $ 100.
Large road block for growth
The rush to place coins in the damn YAM protocol saw several SNX strikers report transaction costs up to $ 99 when they sought to collect weekly rewards for participation. Reddit user posted Willy 3380:
“Requiring a $ 99 transaction fee is ridiculous. This will be a major roadblock for growth if anyone on the team does not address this. ”
To reduce the excess fees, Warwick revealed that Synthetix placed the Ethereum layer two scaling solution Optimism Virtual Machine (OVM) earlier than planned. Already tested on testnet earlier this year, the L2 solution also enables a few thousand transactions per second, instead of the current handful of TPS:
“We are focused on the OVM and I think it will be fair sooner than ‘three to six months’. I think we will move faster than that, because it’s probably one of the top three things you are.’ we need nails. “
The solution works theoretically with any Ethereum smart contract.
Chance of Ethereum dethrone
Layer 2 solutions to Ethereum’s congestion problem are becoming increasingly important due to delays in the release of ETH 2.0. Messari’s head of product Qiao Wang claimed that Ethereum can face aggressive competition from competing scalable blockchains:
“I have changed my mind after using a dozen Defi platforms. As long as ETH 2.0 is not fully deployed, there is an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $ 10 transaction fees and waiting 15 seconds for settlement is just bad UX. ”
