The trading fees collected by Ethereum miners are skyrocketing. The increasing adoption of DeFi creates bottlenecks on the blockchain. If Coinbase Pro had been paying these fees until now, it’s now over.
Transaction volumes are exploding on the Ethereum blockchain. This is delaying the recording of transactions. But the consequence is above all new records in terms of gas fees. Last week, miners collected almost one million dollars in the space of an hour.
For crypto stock exchanges like Coinbase, the situation is proving problematic. For customers, too, the consequences are immediate. Buyers of crypto-money will see their bills increase. Coinbase Pro will no longer cover its costs for its customers.
Coinbase is passing on the costs to its customers.
As of September 17, “Coinbase Pro will pass along network fees directly to our customers,” says the U.S. company. This is a breakthrough in terms of exchange practices. But it is also further proof of the current level of congestion on Ethereum.
“Historically, Coinbase Pro has absorbed these fees on behalf of our customers. However, as crypto has begun to gain broader adoption in applications like DeFi, payments and other projects, networks have gotten busier.” says Coinbase.
And if fees continue to break records, it’s mainly because of the multiplication of initiatives in the decentralized finance sector. SushiSwap and other protocols were contributing to the explosion of transactions.
A good deal for Binance Smart Chain
Last week, however, it was UniSwap that caused a frenzy in the cryptos market. By launching its UNI governance token, the DeFi protocol attracted a host of investors. And exchanges were quick to register this new token on their platforms to take advantage of the transactions.
However, there are a few happy ones, starting with the miners. The latter benefit from a direct financial interest by giving priority to the transactions with the highest fees. Problem: this creates a delay for less profitable transactions.
Other blockchains could also do well, like Binance. With its Smart Chain, the giant hopes to attract a growing number of new DeFi projects. A week earlier, its founder had already boasted of reaching 40% of Ethereum’s transaction volume.