While the second-largest crypto asset by market capitalization, ethereum, has risen 27% against the U.S. dollar in the last two weeks, the network’s average and median-sized gas fees have increased by more than 50%. On the first day of 2023, the average fee to spend ether was around $2.93 per transfer, but today the average cost is 54% higher at $4.52 per transfer.
Rise in Ethereum Value Leads to Increased Onchain Transaction Costs
Sending ethereum (ETH) is becoming more costly as the crypto asset’s value has risen greatly over the last 14 days. At the time of writing, ether is trading at $1,542 per unit, after reaching a high of $1,606 per unit during the same 24-hour period on Jan. 18, 2023.
As ethereum’s value in U.S. dollars has increased, the cost to move ether and the myriad of ERC20 tokens has also risen. Data from bitinfocharts.com indicates that on Jan. 1, 2023, the average ether gas fee was $2.93 per transfer. 18 days later, the average fee to send ethereum is 54% higher at $4.52 per transaction.
Bitinfocharts.com’s median-sized ethereum fee chart highlights a similar pattern. 18 days ago on the first day of 2023, bitinfocharts.com’s median ether fee chart showed the cost was around $1.06 per transfer to send ethereum.
On Wednesday, the same chart showed the cost has risen to 0.0013 ETH per transfer or roughly $1.96 using current ether exchange rates. That means the median-sized ethereum fee has jumped 84% since Jan. 1. Furthermore, while the gas measurement is usually estimated at a much lower rate, etherscan.io’s “Gas Tracker” also shows an increase since the start of the year.
On that day, the web portal’s fee tracker indicates that the high-priority ether gas fee was around $0.30 per transfer or 20 gwei. 18 days later, a high-priority fee is still 20 gwei or $1.14 per ETH transaction, which is an increase of around 280%. On Jan. 1, the cost to transact with Opensea was an estimated $1.12 per transaction and today it’s up to $3.99.
A swap on a decentralized exchange (dex) platform was $2.87 and now it’s up to $10.28 to make a trade on a dex like Uniswap. Sending an ERC20 token like USDT and USDC would cost a sender around $0.84 per transaction, and today it’s around $3.02 to send an ERC20.
Furthermore, the cost of layer-two (L2) transactions has risen as well. Three days ago on Jan. 15, 2023, Bitcoin.com News reported on the rise of Arbitrum and Optimism transactions. On that day, an Arbitrum network transfer was around $0.101 per transfer, and today’s fee is around $0.188 per transfer, according to data from Dune Analytics.
Similarly, Optimism’s network transaction costs were $0.1410 per transfer three days ago, and on Jan. 18, the cost to move coins on the L2 chain Optimism is $0.3039 per transaction. The rise in higher ether gas fees in recent times has broken the record of long months of low fees on the Ethereum network.
What impact do you think the rising gas fees will have on the Ethereum network and its users? Share your thoughts in the comments below.