The gas prices for layer 1 Ethereum can only be described as insane at the moment. According to Bitinfocharts, the average transaction fee on Ethereum rose to $ 63 on November 9, its second-highest level in network history.
The peak came on May 12, when the average gas price hit $ 70. The current average price for a transaction at the time of writing is around $ 57.
Average Ethereum transaction fees – Bitinfocharts.com
Gas costs vary greatly depending on the type of transaction. A simple ERC-20 transfer will cost much less than a complex smart contract interaction. According to Etherscan, it costs about $ 45 just to send Ethereum-based tokens.
Performing a token swap on Uniswap layer 1 or adding or removing liquidity from a DeFi protocol can cost a painful $ 130 in gas. Crypto-critic “Mr. Whale” posted an example of madness with gas charges:
It costs $ 500 + in fees to transfer $ 20 on #Ethereum blockchain.
Banks tremble with fear … pic.twitter.com/q2JIHpBKgn
– Mr. Whale (@CryptoWhale) November 10, 2021
The driver of this gas madness is likely Ethereum Name Service (ENS) airdrop which was launched on November 9 and coincided with the gas tip.
To claim the ENS tokens, gas must be used, and since domain owners get them air-dropped for free, they will not mind using it. Tokens can be claimed until May 4, 2022, but the qualifiers want them right now as prices are pumping.
Till Binance listed ENS on Nov. 10, the only way to sell them was on Uniswap, and it cost users hundreds of dollars in gasoline to do so.
According to Crypto feesENS generated $ 720 million in network fees on November 10 and $ 834 million the day before it was launched.
Registering an Ethereum domain name costs about $ 5 a year, but gas fees can be over $ 250 at the moment.
The ENS hit a record high of $ 83.40 during Wednesday morning’s Asian trading session and is currently up 37% on the day.
Burn Baby Burn
The only result of the ridiculously high network fees for ETH holders is that more of the asset is being burned via EIP-1559.
According to Ultrasound. Money, 841,000 ETH, has been burned since the upgrade in early August. At current prices, it’s worth about $ 3.9 billion.
The Fee Burning Tracker reports that ENS has burned 500 ETH, or about $ 2.3 million over the last 24 hours, which is more than MetaMask.