I’m not referring to the Ethereum token (EYH), but to the gas fees associated with using the Ethereum blockchain, the main ‘go-to’ for DeFi. Will Gottsegen in a fine opinion piece for Coindesk quotes a crypto investor named Zhu Su who pulled no punches last weekend, when he tweeted, “Yes Ethereum has abandoned its users despite supporting them in the past. The idea of sitting around jerking off watching the burn and concocting purity tests, while zero newcomers can afford the chain, is gross.”
Before we go any further, Gottsegen says we should be aware of the fact that Su is a founder of investment firm Three Arrows Capital, which is betting big on an Ethereum competitor called Avalanche. So there is an agenda behind Su’s attack on Ethereum, but he may have a point about the gas fees.
If you want to use dapps, explore DeFi protocols, or get in on the NFT (non-fungible token) trend, you will eventually come up against Ethereum’s fees which – at this point in the development of the blockchain – can be shockingly high, as Gottsegen says. He points out that minting an NFT on Ethereum will generally cost between $60 and $250, depending on the time of day and the stress on the network. And the more users there are competing to get their transactions through, the higher the fees go.
Gottsegen describes his own experience when he tried to swap “about six cents worth of ETH for 50 Pisscoin”, the latter being an Ethereum-based token he was researching for a story, only to be told “I would need to pay an additional $616.10 for a transaction that might clear in about 40 minutes.” What is more, if the transaction failed the fees would be lost forever, as is the case with crypto.
Of course, Ethereum has its many defenders. Crypto venture capitalist Chris Dixon, whose company, Andreessen Horowitz, is heavily invested in the Ethereum ecosystem replied to Su’s tweet suggesting that the network is still in its infancy, and that infrastructure may eventually make things cheaper and easier to use.
But at the moment infrastructure is minimal. Polygon, a so-called “layer 2″ scaling product built on top of Ethereum, is designed to make fees a little cheaper. Other networks, like Solana, are betting that users may just ditch Ethereum altogether.
Gottsegen concludes by saying, “As it’s now set up, Ethereum is like a poker table with a high buy-in. Everyone else will have to wait for a cheaper option.”