Skyrocketing Ethereum fees and the exorbitant costs of interacting with DeFi smart contracts, threaten the growth of the sector.
The surging popularity of decentralized finance (DeFi) protocols on Ethereum (ETH) has contributed to skyrocketing fees, with the network processing an all-time high of $6.87 million in total fees yesterday.
Speaking to Cointelegraph, Synthetix (SNX) founder and CEO, Kain Warwick warned that high fees were impacting the growth of DeFi, stating:
“In the last three months, we’ve gone from an environment where DeFi was expensive to use and a little bit slow, to now, [where] for a lot of people it’s prohibitively expensive.”
Ethereum fees have spiked nearly 100% over the past 24 hours as congestion saw transaction expenses smash the previous high of $3.27.
Ethereum transactions fees, 3-month chart: BitInfoCharts
While the average Ethereum transaction fee is more than the daily income in many countries, the additional smart contract executions needed to engage with DeFi protocols has seen users report fees of up to $100.
Major roadblock to growth
The rush to stake coins in the doomed YAM protocol saw numerous SNX stakers report transaction fees as high as $99 when seeking to collect weekly participation rewards.