In a recent tweet, Changpeng Zhao, Binance’s CEO, complained about the increase in gas tariffs for transactions on the Ethereum network and for ERC20 tokens.
Due to the increase in DeFi’s activities, transactions with Ether were at high levels. CZ in its tweet says that Binance loses between $10 and $20 for every withdrawal a customer makes using the Etoro network and for him sooner or later all exchanges will have to revise their withdrawal charges.
This whole scenario goes back to the 2017 rally, when Bitcoin and therefore all the crypto currencies were highly valued and in fact the transaction fees were very high. The price of gas is a widespread indicator of average commission prices that vary by transaction.
Ethereum’s huge buying wall sends ETH a maximum of 19 months against Bitcoin
The DeFi Ecosystem is to blame
The only ones who benefit from expensive use of the network are the miners of Ether. Data provider Glassnode reported that Ether’s miners earned more than $500,000 in commissions in the last hour, setting a new record. Compared to April, in August, the miners earned 38 times that amount in transaction fees alone.
The DeFi ecosystem and its protocols are driving all this inflation in Ether’s rates and making average transactions costly. Any transaction with DeFi tokens costs an average of $10.
On average, a transfer made with Ether costs $4, but interaction with DeFi protocols is becoming more expensive, around $17, making it difficult for more users to interact with the DeFi ecosystem.