High Ethereum gas prices make it impossible for ERC-20 projects to run any microtransaction payments on Ethereum. This defeats the idea of using the Ethereum network for one of its principal use cases.
Gas fees are part of Ethereum. They are the price required for miners to execute transactions. This fee is not constant, it fluctuates depending on network demand. A transaction can be delayed or outrightly rejected if it does not meet the miners’ threshold.
The miners’ threshold depends on network usage and congestion. In a way, miners prefer the network to be congested so they can benefit from charging high gas fees. Currently, the decentralized finance (DeFi) movement, the road to Ethereum 2.0 and soaring (ETH) transactions are partly to blame for this unsustainable position.
While miners would love to see gas fees going to the moon, this is not good for Ethereum in the long run. There are organizations that pay their contractors in ether because of cheaper transaction fees. However, under the current conditions, it is economically impossible. In the end, there is no incentive for using the Ethereum network. At worst, it becomes a liability.
A solution must be found, and it could come outside the Ethereum network. There are many possible candidates. In response to the high gas fees, Ethereum co-creator Vitalik Buterin that “more people should be accepting payments directly through zkSync/loopring/OMG.”
But first, a look at some of the principal factors in Ethereum’s rising gas prices and how they converge, as well as a few solutions.