Ethereum Gas Fees Have Risen To New Highs Due To The Recent NFT Hype
Following the launch of Yuga Labs’ nonfungible token (NFT), which caused gas costs to skyrocket to new highs, many Ethereum users were displeased.
Yuga Labs, the company behind the hugely popular Bored Ape Yacht Club NFT collection, released a new land title collection called Otherdeed for its Otherside Metaverse over the weekend.
The NFTs could be minted with the project’s APE coin, but the gas fees had to be paid in ETH. According to Etherscan, due to high demand, the average cost of an Ethereum transaction soared to above $400 at the moment. BitInfoCharts, a network fee tracker, said that average fees reached an all-time high of over $200 on May 1.
Yuga Labs apologized for the Ethereum network outage and offered an alternative,
“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale.”
The good news is that Ethereum transaction costs have soon returned to normal, with Etherscan reporting an average of $3 per transaction at the time of publication.
Another upside for the network is that it has become deflationary as the amount of ETH burned through the EIP-1559 mechanism has reached new highs.
More than 70,000 ETH, or more than $200 million, were burned during peak demand, pushing issuance into deflationary zone by as much as 18%.
According to the Ultrasound, the current ETH burn rate is roughly 6,000 per day, or around $17 million.
Money tracker. Issuance has returned to an inflationary status but is predicted to become deflationary again once ‘the Merge’ ushers in proof-of-stake and the end of the mining process.
Other than that, NFT minting has resulted in the burning of 55,815 ETH, totaling $160 million. Over the last week, NFTs have been responsible for more than 70% of all ETH burnt.
Over the weekend, Ethereum prices fell to a monthly low of $2,740, but have recovered 2.4% in the last 24 hours.
As a result, on the morning of May 2, the asset was trading for $2,860. ETH prices are currently on a downward trend, having dropped 17% in the last month and 41% since the all-time high of $4,800 in November.
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