Ethereum 2.0 A New Upgrade with Same Old Problem: Ether Network Struggles As Fees Sky High

By: Henry Felix

January 04, 2021 10:22 AM

Ethereum Hits a new all time high, its highest and best run in three years came to a early end with with a pullback to under $900 from $1055.

The network's traffic tolerance has been an issue for years. Transactors suffered major delays and fees near the height of the last major crypto bull run when a cat-centric blockchain game called CryptoKitties took off in popularity.

Fees on the Ethereum network have reached an average of $10.20 per transaction as of Sunday,it got even higher on Defi platform such as Uniswap where conversion fee went above $105, according to recent data reports. The network's fees went higher on only two occasions in 2020, briefly averaging $12.54 in early September. They again rose to $11.69 near the middle of the same month.

Defi Are Not To Be Blamed This Time Out 

Ethereum network transactors faced high fees on and off last year as a partial result of the decentralized finance, or DeFi, boom, which utilized the blockchain for various lending and yield farming activities. At times, the high fees made it difficult for contributors to participate in DeFi activities.

ETH 2.0 Launch Not Solving Just Yet
Ethereum recently commenced its long-awaited network upgrade journey, called Ethereum 2.0, moving the network over to a proof-of-stake mining algorithm. The upgrade is expected to bring massive scaling to Ethereum, although the process will likely take years to fully play out.