The increase is the gas fees for Ethereum is having a negative impact on the usability of the network. Binance CEO Changpeng Zhao mentions that the exchange is looking at a loss of $10-$20 per withdrawal. Zhao tweeted,
The high ETH network gas fees is causing problems for most exchanges, running with $10-20 loss on each withdrawal. Will have to adjust our withdrawal fees sooner or later.
This is reminiscent of the 2016-2017 bull cycle when Bitcoin withdrawal fee was increased on crypto exchanges. High fees act as huge barriers for network adoption.
Vitalik Might Have a Couple of Solution
Nevertheless, Vitalik Buterin, the co-founder of Ethereum is pitching both short and long-term solutions for it.
The eventual long-term solution is obviously the launch of Eth 2.0. However, before that, the use of “OMG or zksync or loopring” might do the trick for now. Vitalik says,
In a rollup-heavy ecosystem, on-chain gas fees would remain the same, and 465 gwei may even become the norm, but most transactions would be happening inside rollups, where actual fees paid by users would be hundreds of times lower.
Yesterday, Tether and Gitcoin announced the migration to ZK-rollups. Vitalik mentions that rollups will also make layer-2 solutions like Matic, OMG usable for making transactions. He notes that,
The current crops of layer 2’s do not support general-purpose contracts. Optimistic rollups (coming soon) will.
Other blockchain solutions include using blockchain bridges like Polkadot and Ren to increase the scalability. While some users are apprehensive, Vitalik is confident of layer 2 adoptions. Last but not least, he also published an Ethereum Improvement Proposal (EIP-2929) to maintain the high gas fees in case of a DoS attack.
Which solution do you think is best? Please share your views with us.