02 May 2022

New all-time high in daily Ethereum transaction fees

The largest NFT mint in history took place last Sunday, pushing the Ethereum transaction fees to an all-time high.
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Source: CoinMetrics
Last Sunday, users paid $231 million to transact on the Ethereum network, twice as much as the previous all-time high of $117 million in May 2021. The cause of the fee surge was Yuga Labs' latest NFT launch. They minted 55,000 "Otherdeeds" NFTs, each giving access to a virtual plot of land in their new Bored Ape Yacht Club-themed metaverse "The Otherside". An Ethereum block has a maximum size of 30 million gas, and minting one NFT requires between 100,000 and 200,000 gas. The sudden escalated gas demand led to a massive surge in the gas price, as eager NFT buyers desperately tried to outbid each other to get their transactions prioritized by the miners. On May 1st, the mean transaction fee for a simple ether transaction was $200, but during the hours of the NFT mint it was multiples higher. The usage of the Ethereum network is surging, and this is the final incident to showcase how important it is for Ethereum to improve its scalability. The network aims to introduce sharding in 2023 as part of its Consensus Layer upgrades, which should drastically improve its capacity. While users may not be happy about the enormous fees, the miners are always welcoming clogged days as they get the opportunity to pocket the massive transaction fees, making ether mining an extremely profitable endeavor.
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