When the DeFi crazy first took off at the end of the summer/beginning of autumn the number of transactions completely overwhelmed the ecosystem and led to gas prices skyrocketing. Gas is the cost of a transaction on Ethereum Network and is paid in ether. Where months prior to the DeFi crazy the cost of a transaction was maybe a couple of dollars USD the price had shoot up to well over $100. During this time it was a bargain to find a transaction that was less than $25 and yet that did not really stop the crazy leading for people to wonder what the future of Ethereum was going to be if it priced out so many people. 

While Phase 0 of Eth 2.0 is underway and there have been some things done to help lower the cost of transactions they still remain very high. For instance one of my payouts at the end of December cost $80 in Ethereum at the time. I did not withdraw $80 worth of BAT and was blown away at that price when the crazy had really died down a lot. 

This lead me to wonder if this was causing more people to be priced out. One big thing to note though is really the majority of people that are doing this right now are able to absorb hits to some extent. With the future of DeFi being based on easy access for all socioeconomic classes the fee cost is still to high. I wanted to find out myself how and what the effect of this monumental price increase had done.

The reason behind these new very high gas fees is the catch 22 of the increase in Ethereum's price. While people for are Hodlers are loving the increase in their assets value those who want to use the network are both paying more money for less ether and still facing huge transaction fees. When I looked this up I found an article from Decrypt that said the cost of a transaction was up 400% the first 4 days of 2021 alone. Personally I had a transaction that was going to cost me 0.05 Eth a few days ago which was give or take $55 worth! When you are only trying to move around a few hundred dollars this is a tough pill to swallow! The price increase has really saturated the network or one might say begun to overwhelm it once more. 

While I know Eth 2.0 is supposed to lower the cost of transactions I wonder now if it will be able to keep up the growing number of investors. DeFi needs for transaction costs to be much much lower. Transactions around a few dollars tops would be good and under a dollar a pipe dream but would be very good for the DeFi ecosystem. The barrier of entry or the cost that one must pay to enter the DeFi world cannot be extremely high as this prevents middle and lower class entrance. 

I never thought I would be for Ethereum either falling down quite a bit to let me reload on it if these prices are going to stay or for the price to stagnate so that the number of transactions decreases due to the lack of explosive growth in Ethereum's price. Either one of these would eventually lead to lower gas prices or gas prices that those of us without huge amounts of Ether can adapt to deal with. I have my fingers crossed though that Eth 2.0 continues to chug along in development so that it can really get ahold of these fees and lead to a more stable gas price. 

I hope everyone is staying safe during this time. If you would like to further support me my referral links for the Coinbase Earns of Compound (COMP), Stellar Lumens (XLM), Orchid (OXT), Band Protocol (BAND), and EOS (EOS) are down below. Thank you for reading this and for all of the support yall have shown me! 

Compound (COMP)

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