Why did Ethereum transaction fees rise to a new record high?

Ethereum transaction fees rise to a new record high for these reasons!

Ethereum transaction fees have increased nearly 400% since January 1, 2021.

This increase not only caused traders to incur higher costs on their transactions, but also led to questions about Ethereum, its future, and when to solve such a dilemma.

According to Glassnode, Ethereum transaction fees have reached an all-time high, reaching $ 898,000 in one day.

This is narrowly ahead of the last high seen in January 2018.

Gas fees - which measure the cost of carrying out a transaction on the Ethereum network - are in flux.

These fees increase as demand for the Ethereum network grows.

“Gwei” is a small fraction of Ethereum used to measure gas charges on the Ethereum network.

According to Etherscan.io, a site that provides data on the Ethereum network, gas fees rose from 64 "Gwei" on January 1 to 309 "Gwei" yesterday, an increase of 382%.

According to the same site, gas fees, despite their rise, are still rising to new record levels.

On January 1, the gas tariffs were around 240 "Gwei", and later increased to 700 "Gwei", which represents an increase of 191%.

What are the reasons for the rise in fees for Ethereum transactions to a new record high?

One of the reasons for the high fees for Ethereum transactions is the expansion and increase in activity in the decentralized finance (DeFi) space, most of which works on the Ethereum blockchain.

Alex Svenvik - CEO of analytics platform Nansen and co-founder of D5, an independent and decentralized organization of data experts - told his first-hand experience with the rising gas fees on Twitter:

I was asked to pay $ 23 in consent transaction fees, and an additional $ 83 for an undisclosed transaction?

While PhutureDAO co-founder Charles Story commented about the high fees for Ethereum transactions, saying:

With the current growing interest in DeFi financing, the network is reaching its highest levels of activity.

A side effect of network activity levels is the high gas fees that revolve around each transaction.

While one Twitter user expressed his anger at the high fees for Ethereum transactions, and stated the following:

The high fees for Ethereum transactions make us ask:

Is blockchain only for the wealthy?

Do only the wealthy consider these transactions good value for money?

Looking to the future, Ethereum users are eager to see the arrival of the second, expansionary layer of the Ethereum blockchain, which holds a number of promises, the most important of which is ending network congestion and easing fees.