The total fees on Ethereum surpassed that of Bitcoin on 10th June. The increase in the adoption of smart contracts and stablecoin issuance has been highly positive for Ethereum growth. According to a report from Coinmetrics,
ETH median fees have, however, grown significantly since the beginning of the year. On January 1st, 2020, ETH median fees were a little less than $0.04.
Ethereum blocks have been mostly been full over the last couple of weeks. This prompted the developers and miners to increase the gas limit on the network.
The median fee on Ethereum is currently ranging between $0.47-0.65. The median fee Bitcoin on which rose to a high around $5 near halving have returned to $1 and $1.50 range this week. This is particularly worrisome for Ethereum because the majority of the transactions on the network is for Non-ETH transfers. Hence, the transaction fees for secondary transactions must be considerably smaller to process smart contracts.
According to another report, more than 89% of Ethereum’s transaction is occupied by non-ETH transfers. It is mostly dominated by stablecoin transfers and DeFi applications. Nevertheless, there are other interesting applications on Ethereum which includes gaming and digital collectables.
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The engagement on Ethereum blockchain has increased considerably since the beginning of 2020. While it has been positive for adoption, it is again raising significant concerns around the scalability of Ethereum.