As a result of the surge in the ETH gas fees required to confirm transactions on the Ethereum blockchain, the viability of smart contracts is now being threatened.
With more projects on going up in the DeFi space, one major pullback for the network is the ETH gas fees required to carry out transactions on the network. Investors and traders on the DeFi space need to pay for key activities like moving funds in and out of the pools especially in yield farming.
With the fees not planning to reduce anytime soon, the viability of smart contracts is constantly being threatened. In a report that was submitted by Boxmining, the current DeFi boom is taking on the shape that ICO(Initial Coin Offering) took on in 2017, thereby bringing up competitions between a vast number of projects.
Sushiswap ignites ETH gas fees battle as it rivals Uniswap
In the report, a project, Sushiswap, was noted as the major reason for the recent rapid rise in the ETH gas fees, and interestingly, Sushiswap is just a week old. Some few days back, the average transaction fee on the blockchain was said to be around $15 owing to the massive amounts it had locked in just five days.
Interestingly, the Uniswap fork already locked down about $1.2 billion in the five days. The report specifically said the popularity of the project in China as a result of the name. With the Sushiswap already proving to be a stubborn Uniswap rival, it has started a transaction fee war since its emergence.
Ethereum miners the biggest winners but concerns on the sustainability of the network
As it stands, the Ethereum miners are the biggest winners in this ETH gas fees battle because it signals more rewards for them in the long run. Even though the rewards are still incoming, one thing that has been a major source of worry is the sustainability of the network as a result of the high fees.
Experts have said that the increase in the transaction fees means that some small scale investors are getting kicked out of the projects in the DeFi sector. Some platforms have taken the bold move to suspend operations until when the transaction fees become more affordable for their clients.