For quite some time, Ethereum High transaction fee has come back to haunt the second largest cryptocurrency by MCap. It has turned out the second popular coin is trying to swallow its tail. Many investors, especially the small scale DeFi enthusiasts holding ETH are left with no choice but wait for the transaction cost to come down.
Despite the spike in DeFi token value, demand for ETH has been rising and this has come with increased transaction costs. The influx of DeFi ignited transaction has seen the transaction price get out of reach for the ordinary Ethereum network user or the ETH holder. Making the network expensive and slow is a surefire way of slowing its adoption.
Ethereum High transaction fee and DeFi Products
The Ethereum ecosystem plays host to several DeFi projects and the Ethereum high transaction fee is passed on to the investor irrespective of how much they are worth. Any fee above $1 on any blockchain based platform is not a good value proposition for any digital money market goer.
For the Ethereum miner, users who pay premium fee get top priority when it comes to including transactions in the next block. This explains why whales get top priority in getting their transactions processed compared when Publish0x users trying to cash out their ETH earnings.
Ethereum High Transaction fee Not New in Crypto
It has been a long journey for blockchain and crypto. The current Ethereum High transaction fee is nothing new and Bitcoin has passed the same route. In fact, one of the reasons why the number of altcoins has been on the rise is to lower transaction fees. As long as any transaction fee stays above the $1 mark, crypto mass adoption will remain a mirage.
One of blockchain vision is to keep transaction costs near zero. It is not designed to benefit the rich but instead to give the ‘bank-less’ hope to own a wallet that should act as a ‘borderless bank account’. Giving whales the leeway to access fast transaction is an easy way of killing Bitcoin and crypto vision. High transaction fee is sending investors back to centralized financial entities thus killing crypto adoption.
Ethereum High Transaction fee Favor the Rich
The Ethereum High transaction fee, as you might have noticed tends to favor the rich. This comes at a time when many are exiting centralized financial service providers for decentralized protocols of which Decentralized Finance (DeFi) is the current hot cake in the digital money market.
It is not about the Ethereum High transaction fee but an issue across the crypto space. To build a sizeable crypto wealth, transaction fees need to be near zero. This partly explains why many newcomers in the space are investing in altcoins before contemplating to invest in either Bitcoin (BTC) or Ethereum (ETH).
With many DeFi projects riding on the Ethereum network, it becomes hard for more users to hold ETH and invest in the trending DeFi space.
New crypto goers through the Ethereum network might find the user experience unfavorable and shun crypto altogether and this is bad for Ethereum and general crypto adoption. Whichever way I look at the Ethereum High transaction fee, those transacting high amounts benefit more compared to the small scale investors like me.
