At the moment, gas prices for layer 1 Ethereum are insane. Bitinfocharts reports that the average transaction fee for Ethereum rose to $63 on Nov. 9, making it its second-highest ever in network history.
May 12, when the average gasoline price reached $70, was the peak. At the time of writing, the average transaction cost is $57.
Transaction fee for Ethereum Source: BitInfoCharts
Average Ethereum Transaction Fees. Bitinfocharts.com
Gas prices vary greatly depending on the type of transaction. Simple ERC-20 transfers will be much cheaper than complex smart contract interactions. It costs approximately $45 to send Ethereum-based tokens, according to Etherscan.
A token swap on Uniswap Layer 1 or adding or removing liquidity from a DeFi Protocol can cost $130 in gas. Mr. Whale, a crypto critic, posted an example of the gas fee insanity: Whale posted an example of gas fee madness:
Transferring $20 on the #Ethereum Blockchain costs $500+
The banks are quivering in fear… pic.twitter.com/q2JIHpBKgn
— Mr. Whale (@CryptoWhale), November 10, 2021
This gas madness is likely to be driven by the Ethereum Name Service (ENS), which launched on Nov. 9, and coincided with the spike in gas.
Gas must be used to claim the ENS tokens. Domain owners get them airdropped free of charge, so they don’t mind spending it. You can claim tokens up to May 4, 2022. However, those who are eligible want them now because prices are high.
Until Binance listed ENS Nov. 10, the only method to sell them was through Uniswap. Users had to pay hundreds of dollars for gas.
CryptoFees reports that ENS generated $720 Million in network fees on Nov. 10, and $834 Million the day before it launched.
An Ethereum domain name can be registered for $5 per year. However, gas fees may exceed $250.
ENS reached an all-time high at $83.40 on Wednesday morning’s Asian trading session. It is currently up 37%.
Burn Baby Burn
The only result of the outrageously high network fees charged to ETH holders is that more assets are being burned via EIP-1559.
According to Ultrasound.Money 841,000 Ethereum have been burned since the upgrade in August. This is approximately $3.9 billion at current prices.
According to the fee burning tracker, ENS has burned 500 ETH or $2.3 million in the last 24 hours. This is more than MetaMask.
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