The cost of using the Ethereum network has risen to the second-highest level ever, and the hype surrounding ENS airdrops could drive costs up.
Ethereum Network Gas Fee Rise to $63
According to data from Bitinfocharts on November 9, Ethereum’s average transaction fee rose to $63, which is the second-highest value in internet history. For now, Ethereum’s first-tier gas price can only be described as insane.
The peak was on May 12, when the average gas price hit $70. At the time of writing, the average cost of an ongoing transaction is about $57.
Average Ethereum Transaction Fees. Source: Bitinfocharts.com
The cost of natural gas varies depending on the type of transaction. Compared to complex smart contract interactions, the simple ERC-20 transmission costs are much lower. According to Etherscan, the cost of simply sending Ethereum-based tokens is around $45.
The token exchange on Uniswap Layer 1 or adding or removing liquidity from the DeFi protocol can cost $130 in gas. The crypto critic (Mr Whale) posted an example of insane gas fees:
Is ENS Airdrop the Cause of the Ethereum Gas Fee Spike?
The driving factor of this gas madness is likely to be the Ethereum Name Service (ENS ) Airdrop, which was launched on November 9th and coincided with the gas peak.
Gas must be used to claim ENS tokens, and since domain owners put them down for free, they will be happy to spend it. The tokens can be claimed before May 4, 2022, but due to the price increase, eligible individuals now want tokens.
Before Binance listed it on November 10th, the only way to sell ENS was through Uniswap, and it would cost users hundreds of dollars in gas.
According to CryptoFees data, ENS generated $720 million in network costs on November 10 and $834 million the day before its launch.
The annual cost of registering an Ethereum domain name is around $5, but the current gas fee can exceed $250.
ENS hit a record high of $83.40 during Wednesday morning’s Asian trading session and is currently up 37% over the day.
The EIP-1559 Upgrade
The only result of the ridiculously high network fees for ETH holders is that more assets are burned through EIP-1559.
According to Ultrasound.Money, 841,000 ETH have been burned since the upgrade in early August. At current prices, that’s a value of around $3.9 billion.
The expense tracker reports that ENS has burned 500 ETH in the past 24 hours, which is roughly equivalent to $2.3 million, which is more than MetaMask.