After suffering from outrageous gas prices for several weeks, things are returning to normal for Ethereum users. With a median gas price in a more normal range, the transfer’s median cost is below $6 again. That is, assuming one doesn’t want to interact with ERC20 tokens, DEXes, or DeFi.
Ethereum Gas Prices Return To Normal
It is never a good sign when a network designed for building applications becomes too expensive to use. For Ethereum, this is a recurring problem over the past few years. Although the switch to Ethereum 2.0 will help address some of these concerns, the in-between period can pose many problems.
Over the past few weeks, Ethereum’s gas prices have proven problematic for different reasons. Whether one wanted to send ETH, interact with DEXes, ERC20 tokens, or even DeFi solutions, the average transaction cost was often too high. Spending between $20 and $80 to complete actions on the network is far from pleasant for users.
Today, the landscape looks a bit different. The median gas price has remained somewhat stable near 149, which is a vast improvement over the 390+ a little while ago. Moreover, the median transaction cost is now $5.88, at least for ETH transactions. Sending ERC20 tokens or other activities remains a lot more expensive. Interacting with smart contracts is novel, but at these rates, it also becomes very unattractive.
Even though all of these actions share the same gas prices, their actual cost in US Dollars is very different. Using Uniswap for a trade can still cost more than $30, whereas a Compound deposit will cost over $50. Unacceptable rates across the board, yet there is no real improvement in sight. Even with EIP-1559 on the table, it seems unlikely that things will be more manageable.
Gas Limit Utilization
It is often useful for those familiar with Ethereum and its gas prices to look at the gas limit per block. This limit increased in July 2020 to just over 12 million, yet the network is nearly always at full capacity. If there is no extra room for gas, this situation may spiral out of control again in the coming weeks.
The median gas prices are rising again. Despite dropping sharply in late February of 2021, the momentum is turning around. Although the current levels are not necessarily worrisome, it is evident that network activity is increasing. What that will do to the cost of transactions is difficult to determine.
At this rate, it seems a matter of time until the gas limit per block needs to be increased again. However, Ethereum 2.0 will introduce sharding, negating the use for such an increase. The coming months will prove crucial for the Ethereum network. Higher gas prices will prove problematic, yet it may only be a short period of pain to endure for the users.