Proponents of Ethereum who believe that the London Hardfork will have an influence on or address the problem of high network costs are clearly misguided, as the gas fee is progressively creeping back to new highs. According to Glassnode’s data, the average fee paid on the Ethereum network based on a 7-day Moving Average has reached 0.008 ETH ($25.96), the highest in three months.
Ethereum is the world’s most congested public blockchain network, which has had an outsized impact on network fees, which has been a major source of concern. Prior to the deployment of the EIP 1559 upgrade, users can establish transaction limitations, giving miners the ability to choose which transactions they confirm at any given time. This usually leads to gas battles, rendering the network virtually unusable.
With a base price being listed by the network, the arrival of the London Hardfork was supposed to shift the storey. The ability to leave a tip for miners, on the other hand, has sparked a quiet gas battle, which is supporting the rising gas price.
Influence of the NFT
The Ethereum-based Decentralized Finance (DeFi) protocol is known to be used for a large number of transactions, all of which has a direct impact on the rising gas fees. However, the surge in Ethereum network costs has been spurred in part by the emergence of the Non-Fungible Token (NFT) metaverse.
The average cost of minting an Ethereum-backed NFT is between $70 and $100, with prices rising to $200 to $300 at peak periods. With everyday transactions on NFT marketplaces like as OpenSea and Rarible increasing by the day, it’s unsurprising that NFT contributions to the overall gas fee are not insignificant.
The design of Ethereum 2.0, which will operate as a Proof-of-Stake (PoS) network, will allow for more Transactions Per Second to be processed (TPS). The Ethereum blockchain’s current TPS is only 10 to 15, and this constraint is the source of the congestion that is driving up gas prices. With the introduction of the PoS network, this figure will be increased to 100,000 TPS, providing a long-term solution to the congestion problem.
While the emergence of EIP 1559 is beneficial to the price of Ether due to its deflationary features, it is ineffective in lowering gas expenses. This is an argument for Ethereum 2.0 to be released as soon as possible. The price of Ethereum is currently $3,245.73, up 0.15 percent in the last 24 hours.