The price of Ethereum rose to $3,600, resulting in a significant increase in gas fees due to increased network traffic.
According to Etherscan, gas fees topped 174gwei by midday Monday, incurring significant costs for traders to transact within the Ethereum ecosystem.
The fee increase has had a particular impact on a variety of activities. For example, the cost to complete a typical NFT transaction on Ethereum (ETH) is over $372.29 during peak hours on Monday.
Likewise, token swaps and borrowing transactions on Ethereum suffered exorbitant fees, reaching $220 and $186, respectively. The average transaction fee for linking funds to another blockchain is over $70.
Uniswap, a key player in the Ethereum ecosystem, was confirmed to be the largest consumer of gas, with over $4.2 million ETH burned in transactions in just one day. The fee increase coincides with a significant surge in the value of cryptocurrencies and NFTs. Ethereum reached the $3,500 milestone for the first time since early 2022, and CryptoPunks NFTs sold for $16 million worth of ETH.
The timing predates Ethereum’s Dencun upgrade, which aims to reduce transaction costs through proto-danksharding. The upgrade, which will be released on March 13, is expected to significantly lower gas rates, and several Layer 2 developers have suggested that these rates could become nearly useless.
“We are entering a world where most users will never experience gas,” said David Silverman, vice president of product at Polygon Labs, suggesting a future in which Ethereum’s transaction costs could be significantly minimized.