Some of you may have noticed a delay in PRE withdrawals recently. We’d like to discuss some of the challenges we are working through as we move toward a solution.
Currently, PRE counts thousands of on-chain token holders. This number has been increasing rapidly as our user base continues to grow, with more than 1.6 million registered users currently.
Every month, we process hundreds of withdrawals for our users. We’ve covered the gas fees for these withdrawals since 2017, which wasn’t a problem as fees were usually around $0.10. However, with the increasing popularity for the Ethereum Network and DeFi projects, fees for ERC-20 token transactions have recently been costing up to $10 per transaction.
As you can imagine, these costs are exorbitant and unsustainable. One hundred transactions now costs $1,000 USD. This is not economically viable for transactions of 1,000 PRE, as it means we’re paying $10 in transaction fees for $20 worth of tokens (50% fees).
We are constantly monitoring Ethereum gas costs and are taking advantage of any drops in cost to push through outstanding withdrawals. Because this has been a sustained increase recently, however, it’s been challenging to keep up with the queue of withdrawal requests while simultaneously managing timing of transactions to control these volatile costs, and so we’ve built up a bit of a backlog.
We are not the only project to encounter these challenges, and we are all trying to determine the best way to handle these unprecedented costs as they truly wreak havoc with the business models we have established. This is not a 50% or even 500% increase in fees, we are talking about a 5,000% increase in costs.
While we are navigating these challenges, we ask for your patience and are writing to formally communicate that it is not realistic for Presearch to be able to honor the previous 72 hour withdrawal expectation until we establish a new path forward, which may include one or more of the following:
- A return to average gas fees (somewhere in the $0.25 — $0.50 range) driven by market forces
- Passing along gas costs to those requesting withdrawals (either in whole or in part)
- Implementing a new blockchain with lower transaction costs
- Batching transactions in a different way to reduce transaction fees — this could include facilitating internal transactions that enable holders to sell / transfer PRE to other holders within the Presearch ecosystem
We realize that this is a major inconvenience for our users, and we apologize sincerely for this situation. The blockchain space is new, and we are all encountering challenges and developing solutions together.
We are actively working through the best way to handle this scenario for the good of the project and all of our stakeholders. If you have any ideas or feedback you’d like to provide as we’re working through solutions, please feel free to reach out, as we appreciate community feedback and always consider it strongly in our decision-making process.
We will make a decision on how best handle this transaction fee challenge by the middle of September, and in the meantime, will push forward — identifying strategic opportunities to process transactions and doing our best to minimize fees while working through the queue of withdrawal requests.
Once again, we apologize for the delays and appreciate your patience and understanding.