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Gas fees on Ethereum (ETH) have continued to go higher and higher. Some industry experts have warned that the high gas fees may send investors away from the cryptocurrency if nothing is done about it. According to Bitinfocharts.com, the average ETH transactions have surged to record levels of $30, with some fees as high as $50. As a result of the high fees, retail investors may be discouraged to buy Ethereum (ETH) or use the network.
A popular crypto influencer Lark Davies has called on Ethereum developers and co-founder Vitalik Buterin to speed up the mainnet phase of Ethereum 2.0. He stated that the ETH 2.0 would help reduce overall Ethereum fees, which is exactly what the market needs at the moment.
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Davis posted a video to over 200,000 of his subscribers telling them that the transaction cost on the Ethereum (ETH) smart contract platform has become unbearable. It has led to an exodus of traders to alternative decentralized finance (DeFi) platforms such as Binance Smart Chain (BSC).
He said Ethereum’s competitors are gradually winning over Ethereum devotees because of the high gas fees. According to him, the only solution is to launch ETH2.0 sooner rather than later.
ETH2 phase 1 will improve speed and scalability
The high gas fees on Ethereum mean that only a few institutional investors will not have issues paying the gas fees because of the proportion of their investments. But for small and retail traders, the high fees have made Ethereum less profitable compared to other options.
Davis also noted that BSC has increased both in relevance and popularity, as the trading volume for BSC-based apps is now very close to their Ethereum-based counterparts. The ETH2 phase 0 was released in December 2020, which allowed users to lock up their Ether for staking.
However, the ETH phase 1 launch will improve scalability and make the network faster. Ultimately, it will also reduce the high cost of gas fees currently seen on the platform.