The success of the decentralized finance (DeFi) movement has been one of the highlights of the crypto and blockchain space in months. However, the influx of millions of people into these protocols has placed tremendous pressure on Ethereum, the network that hosts of decentralized applications (dapps). nearly 80% As the demand for the world's second-largest blockchain continues to skyrocket, so too have gas prices on the decentralized network. Ethereum participants often have to contend with infuriating gas fees that sometimes reach $100 for a simple token transfer. Such untenable costs have become a dilemma even for high-cost users, who often consider moving to cheaper chains like Solana and Avalanche. As more investors try their hand at DeFi, gas fees are shooting over the roof, making engaging with decentralized apps uneconomical for most users. The ongoing has clogged the network even more, causing gas fees to run red hot while threatening the network's top-dog status. NFT-mania This guide seeks to help readers understand the gas fee menace on Ethereum now and in the future. It also examines leading projects that provide solutions and workarounds to optimize gas fees on the popular network. What Are Ethereum Gas Fees? Gas fees are the amount of ETH tokens a user pays to perform an action on Ethereum. The amount is paid to miners, who process/validate transactions and secure the decentralized network. Gas is a fundamental element that allows users to pay for inclusion in the highly sought-after blockchain. Users need to pay gas fees when minting NFTs, sending tokens, trading in DeFi apps, works, or interacting with smart contracts. These charges have risen to insane heights since the DeFi boom in the summer of 2020. Demand for block space on Ethereum has since shot up, primarily driven by an auction-like system, where users who bid higher prices get priority. Miners are incentivized to process transactions of the highest bidder; this fees structure creates a severe problem as thousands of people compete to access limited block space and have their transactions processed promptly. Transaction costs have evolved from being just an annoyance for people looking to use Ethereum to an actual cost that threatens to push many crypto users out of the network. Moreover, the rise of multifaceted DeFi protocols that process highly complex transactions increases the blockchain's stress and exacerbates the fees crisis. Ehtereum Developers Are Handling the Gas Fee Crisis Ethereum currently holds the undesired reputation of being the most expensive blockchain in the market for transacting and building dapps. Per data from Ycharts, the average gas charges on the network hit an all-time high of $373 in February of 2021. Ethereum Average Gas Fees in 2021 | Source Ycharts.com Ethereum developers have implemented various solutions to curb gas fee hikes before the advent of Layer 2 scaling solutions and the final shift to Ethereum 2.0. For instance, the core dev team launched the Ethereum Improvement Proposal (EIP) 1559 in August 2021. This significant technical adjustment altered how transactions are processed on the network and tightened the supply of ETH. The developers have also rolled out several in the that helped ease congestion and tackle the gas fee problem on the network. Berlin hard fork Gas fees are not expected to be a significant cause of concern in the long run, as these costs should decrease significantly with the transition to a proof-of-stake model. However, the shift to ETH 2.0 has faced and is scheduled to roll out in several stages that could drag on well into 2023. multiple delays Projects Optimizing Gas Fees on Ethereum The issue of skyrocketing fees is an immediate threat to the dominance of the second-largest blockchain network. For Ethereum users seeking an instant remedy to the problem, here are four projects offering fee subsidies and other workarounds to help them make huge savings on ever-rising gas charges. Arbitrum Arbitrum is a top layer 2 scaling solution developed by to speed up transaction throughput within the Ethereum network. Launched in August 2021, the project empowers Ethereum participants to settle transactions away from the chain and experience economic efficiency without limits. Off-Chain Labs The relatively new project has introduced the ideal scaling solution within Ethereum's layer-2 ecosystem, enhancing DeFi adoption via its optimistic rollups that integrate enhanced scalability and ultra-low gas fees. The project integrates distinctive features designed to scale any Ethereum contract, offering investors unprecedented compatibility with the leading decentralized network. The Arbitrum Layer 2 protocol derives its security from Ethereum, empowering crypto opponents to optimize their user experience and boost growth in the decentralized finance world. EMETH is a new NFT game that introduces a new Play-to-Collect concept eliminating prohibitive gas fees on the Ethereum blockchain. EMETH The EMETH team recently unveiled its first NFT collection. They plan to launch soon their second mint that integrates a business-savvy solution that alleviates the high gas fees hindering growth in the NFT community. Essentially, the blockchain game reimburses gas fees up to 100%, encouraging users to mint more NFTs regardless of whether gas prices tick upward on Ethereum. The project’s intuitive approach opens the door for gaming fanatics worldwide to participate in grand battles and generate passive income by renting their rare digital collections to members of other NFT communities. Balancer , a popular non-custodial portfolio manager, released the V2 version of its protocol early this year promising to slash transactions and gas charges on Ethereum. The new product introduced an innovative on-chain trading model for ETH tokens that pools all the liquidity locked in its secure protocol into one big vault. Balancer The v2 service radically reduces gas fees for DeFi trades by swapping unlimited tokens and only paying for going into and out of Balancer. It also benefits active traders with cheaper transactions by allowing them to create pools of numerous tokens as they see fit. KaibaDeFi ($KAIBA) is a revolutionary project committed to helping Ethereum users cut down on exuberant gas fees on the network. The project backers have developed a robust smart contract tech at the heart of its ecosystem in the form of KaibaSwap. KaibaDeFi delivers a decentralized gas-efficient infrastructure powered by an Internal Virtual Chain. The experienced developers of KaibaSwap are building an L1 blockchain, dubbed the Lightning Blockchain. The flagship technology will offer gas efficiency, ultra-high-speed, and security while remaining fully compatible with the Ethereum blockchain. KaibaSwap The project plans to expand its next-generation smart contract tech powered by an Internal Virtual Chain across the ERC-20 token ecosystem. The move promises to herald the beginning of the end of crippling gas charges on Ethereum. Final Thoughts Following a wildly successful spell for DeFi and NFT projects over the course of 2020 and 2021, Ethereum has become progressively valuable amid unprecedented demand from crypto fans and investors. Unfortunately, that explosive growth has attracted astronomical gas fees that threaten to make the network unusable by most regular blockchain users. The good news is that ingenious project developers are constantly discovering new ways via which ordinary folks can engage with decentralized applications on Ethereum more efficiently.
