According to recent data from Bitinfocharts, the average transaction fee on the Ethereum network has recorded a meteoric rise to $63 on Tuesday, its second-highest transaction fee on record. The highest on record occurred on May 12 when the average gas price hit $70 per transaction. However, this figure has dropped to $57, press time data.
Typically, gas costs differ based on the transaction type. A simple ERC-20 transfer would cost significantly less than a complex Smart Contract interaction. According to Etherscan, it could cost as little as $45 to send Ethereum-based tokens. However, it could cost over $130 to facilitate token swap on Uniswap layer 1.
Commenting on the excessive Ethereum gas fees, popular crypto analyst “Mr. Whale” tweeted that:
“It costs $500+ in fees to transfer $20 on the #Ethereum blockchain.
The banks are quivering in fear…”
Ethereum Name Service Reward Frenzy Triggering Increased Gas Fees
Reports show that the possible cause of the exorbitant gas fees is the Ethereum Name Service (ENS) airdrop, which launched on Tuesday, the same day ETH fee hit its second-highest point.
To claim ENS rewards, domain holders must use gas. Since these holders get the tokens for free, they have no worries about spending them. While tokens can be claimed till May 2022, the current price surge has caused many of these holders to spend their rewards.
Before Binance listed ENS on November 10, users could only sell their tokens on Uniswap, which cost over $100 in gas fees. According to a report from CryptoFees, ENS generated $834 million in network fees on the day of launch and an additional $720 million yesterday. Meanwhile, ENS hit a record high of $83.40 in the early Asian session today.
Interestingly, along with network fees for ETH holders, token burning has spiked significantly. Ultrasound.Money recently reported that 841,000 ETH (worth $3.95 billion based on the current price)has gotten burnt since the EIP-1559 upgrade in August.
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