The price of Ethereum has surged to $3,600, resulting in a significant increase in gas fees due to heightened network activity. According to data from Etherscan, gas fees exceeded 174 gwei by midday Monday, imposing substantial costs on traders conducting transactions on the Ethereum network.
This rise in fees has had notable impacts across various activities within the Ethereum ecosystem. For instance, executing a standard NFT transaction on Ethereum cost users more than $372.29 at peak times on Monday. Similarly, transactions involving token swaps and borrowing on Ethereum incurred high costs, exceeding $220 and $186, respectively. Additionally, transferring funds to another blockchain incurred an average transaction fee of over $70.
Uniswap, a prominent decentralized exchange on Ethereum, was identified as the largest consumer of gas, with over $4.2 million worth of ETH burned in transactions in a single day. The surge in fees coincides with significant increases in the value of cryptocurrencies and NFTs, with Ethereum surpassing the $3,500 mark for the first time since early 2022 and a CryptoPunks NFT selling for over $16 million worth of ETH.
This development comes ahead of Ethereum’s upcoming upgrade, Dencun, which aims to reduce transaction costs through proto-danksharding. Scheduled for Mar. 13, this upgrade is anticipated to substantially lower gas fees, with several layer-2 developers suggesting it could render such charges nearly obsolete.
David Silverman, Polygon Labs’ VP of Product, expressed optimism about the future, envisioning a scenario where most users will not encounter gas fees at all. This suggests a potential significant reduction in transaction costs on the Ethereum network in the future.