Ethereum touches $3.6k, gas fees skyrocket

Ethereum has seen a price rise to $3,600, resulting in a substantial hike in gas fees amid increased network traffic.

According to Etherscan, gas fees reached beyond 174 gwei by midday Monday, affecting traders with substantial costs for transactions within Ethereum’s ecosystem.

The rise in fees has notably impacted various activities. For example, completing a typical NFT transaction on Ethereum (ETH) cost users over $372.29 at peak times on Monday.

Similarly, Ethereum‘s token swaps and borrowing transactions experienced prohibitive costs, reaching upwards of $220 and $186, respectively. Bridging funds to another blockchain averaged over $70 in transaction fees.

Uniswap, a key player in the Ethereum ecosystem, was identified as the largest consumer of gas, with over $4.2 million worth of ETH burned in transactions in a single day. The fee increase coincides with significant value surges in cryptocurrencies and NFTs, with Ethereum hitting a milestone of $3,500 for the first time since early 2022 and a CryptoPunks NFT selling for over $16 million worth of ETH.

The timing precedes Ethereum’s Dencun upgrade, aimed at reducing transaction costs through proto-danksharding. Coming Mar. 13, this upgrade is expected to drastically lower gas fees, with several layer-2 developers suggesting it could render such charges nearly obsolete.

“We’re going to enter a world where most users are just not going to experience gas at all,” said David Silverman, Polygon Labs’ VP of Product, indicating a future where the cost of transactions on Ethereum could be significantly minimized.