The upcoming Berlin update contains EIPs aimed at reducing transaction costs, but it may not provide a long-term solution.
Though Ether’s (ETH) value has continued to showcase increasing signs of stability around the $1,800 range over the past fortnight or so, users of the premier altcoin’s network have been faced with rising gas fees as well as increasing network congestion issues. To put things into perspective, since summer last year, a time when the DeFi boom was starting to peak, Ethereum’s network fees have more than doubled.While this fee increase quite directly relates to ETH’s increasing value, there is no denying that it also clearly shows growing demand for ERC-20 tokens, stablecoins, as well as various decentralized finance-based offerings in general. As is evident from the chart below, costs of facilitating transactions on the Ethereum network have increased significantly over the last few months, with the average transaction fee touching an all-time high of $39.49 on Feb. 23. Not only that, on March 20, the average transaction fee is at $16, a price point that is quite high, especially for developers and those looking to facilitate small value transactions.Also, as nonfungible tokens continue to gain mainstream traction, it stands to reason that transaction costs on the Ethereum network will continue to rise in the near future. Thus, until a viable scaling solution is implemented in the near term, network congestion and high transaction costs are likely to continue, especially as the NFT sector continues to thrive.Is the network …
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