Friday, April 19, 2024

NFT Marketplaces Diminish in Ethereum Gas Use Amid Huge Fee Crisis.

Non-Fungible Tokens (NFTs) are no longer the top gas consumers on the Ethereum network, marking a significant change in the network’s gas consumption trends. NFT marketplaces accounted for just more than 3% of global petrol consumption last week, according to data from the cryptocurrency analytics platform Nansen. In a significant distinction, the decentralized exchange Uniswap surpassed that figure by over tenfold, reaching 31.99%. Nansen highlighted this development in a tweet, underscoring its significance.

The era in which NFTs dominated the charts of Ethereum gas consumption is over. This week, OpenSea and Blur consumed less than 10% of the top 20 petrol consumers. Additionally, the NFT markets represented more than 3% of all petrol consumers. In contrast, Uniswap was ten times higher at 31.99%.

Despite the continued rise in Ethereum gas cost, this change occurred. Such price surges are not new to the Ethereum network, but they are now less common following The Merge, which completed Ethereum’s switch from a proof-of-work (PoW) protocol to a proof-of-stake (PoS) system in September 2022.

Contrary to original expectations that this shift would increase petrol prices, recent developments indicate otherwise. One trader reportedly paid costs totalling up to 64 ETH, or over $118,600, for a single transaction.

The increased trading of meme coins like PEPE tokens and Floki Inu has contributed to the Ethereum network’s congestion and soaring gas prices. This surge in activity has led to an overwhelming number of transactions, resulting in the significant escalation of gas prices.

In response to the challenges faced, the Ethereum community has proposed numerous Layer 2 (L2) scaling solutions aimed at reducing gas expenses. These solutions, including state channels, plasma chains, and rollups, aim to alleviate the burden on the primary Ethereum blockchain by offloading certain computational tasks. This approach is expected to decrease both gas demand and prices.

Investors have also switched to other networks like Cardano due to the high cost of petrol. By addressing the scalability issue, the Cardano blockchain’s Hydra upgrade, a layer two protocol, has increased the network’s appeal to investors.

NFT Marketplaces’ Use of Ethereum Gas Declines Amid a Fee Crisis first appeared on Coin Edition.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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