High Ethereum Fees Disrupting Developed Platforms
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Ethereum transaction fees, also known as gas, have been extremely high in the last few weeks. Consequently disrupting the business model of a few emerging platforms and apps that rely on the Ethereum network for sending micro and small payments to its users. Some are rethinking their strategy or considering creating their own blockchain as a solution. On Wednesday, September 2nd, 2020 BitInfoCharts recorded that the average transaction fee on Ethereum went as high $14.50. That’s the highest average cost of an Ethereum transaction since 2018 and many crypto enterprises are having problems processing their payments to their customers on time.
Publish0x, a crypto agnostic publishing platform that uses Ethereum and other Ethereum token as payments to content creators and readers, recently announced a delay in payments due to extremely high Ethereum gas fees. With over 30.000 registered accounts, Publish0x was able to complete all the delayed payments requested within a few weeks. And surprisingly without charging users extra fees or changing the withdrawn threshold.
But in order to adapt to the current environment change, Publish0x has decided to pay its users once a month rather than once a week. Despite being a less flexible solution to users by decreasing the number of payments issued, Publish0x was able to maintain the free transfer fees and its low withdrawn threshold of 0.002883 ETH.
Another crypto enterprise that has reported payment delays and serious concerns for the current high costs of processing payments on the Ethereum network is Presearch.
Presearch is an open-source, decentralized search engine that rewards its users with Presearch Tokens for their searches. Presearch tokens were issued on the Ethereum blockchain and because of that, they are directly affected by the high cost of Ethereum fees. The result as reported by the platform: Payment delays.
According to Presearch “Currently, PRE counts thousands of on-chain token holders. This number has been increasing rapidly as our user base continues to grow, with more than 1.6 million registered users currently.
Every month, we process hundreds of withdrawals for our users. We’ve covered the gas fees for these withdrawals since 2017, which wasn’t a problem as fees were usually around $0.10. However, with the increasing popularity for the Ethereum Network and Defi projects, fees for ERC-20 token transactions have recently been costing up to $10 per transaction .” That is an increase of 1000%.
Preseach has announced serious plans to adapt its business plan and is considering adopting a few solutions to maintain the viability and sustainability of the platform. These are:
- “A return to average gas fees (somewhere in the $0.25 — $0.50 range) driven by market forces
- Passing along gas costs to those requesting withdrawals (either in whole or in part)
- Implementing a new blockchain with lower transaction costs
- Batching transactions in a different way to reduce transaction fees — this could include facilitating internal transactions that enable holders to sell/transfer PRE to other holders within the Presearch ecosystem”
In conclusion, there is no dough these platforms must adapt to their environments in order to survive, and in the long run many may choose to build or adapt different blockchains to guarantee their longevity but at the same time, it is truly nice to rely on an established network such as Ethereum. We can only hope Ethereum 2.0 will help Ethereum with its scalability issue and help prevent fees from increasing as high as 1000% as we have seen in the last few weeks. It is certainly too big of a pump of crypto projects to handle. Most are trying their best to hang in there.
Thank you for the read,
All my best, Michelle M.
Originally published at https://www.mammycrypto.com on September 8, 2020.