If you were trying to complete a transaction on the Ethereum network last night, you might have been taken aback by the ridiculously high gas fees you saw.
For example, one user purchased a $25 NFT on Saturday evening. Their total price? $3,325. That's $3,300 just in fees.
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So, what happened?
The Ethereum network charges "gas fees" for every transaction on the blockchain. These fees are used to compensate Ethereum miners for verifying transactions on the blockchain. It's a central component to how the platform works.
Gas fees can greatly range as they're not based on the size of the individual transaction, but on just how many transactions are being made on the Ethereum network at any given time.
If your transaction is being processed during a busy period, for example, you can find yourself paying hundreds in fees just for the transaction to go through.
Users can even pay a higher amount in fees so their transaction gets bumped to the front of the line to ensure it gets processed.
Ethereum transactions can fail if a user doesn't pay enough in gas fees. When this happens, not only does the transaction not go though, but the user is still charged the gas fee.
But, this past Saturday night, the popular Bored Ape Yacht Club (BAYC) brand by Yuga Labs launched a brand new NFT project called Otherside. The project offered 100,000 "deeds" for "virtual land" in the form of NFTs. The original Bored Ape NFTs can go for hundreds of thousands of dollars. So, cryptocurrency investors lined up to try and score at least one of the 100,000 NFTs in its latest series.
The result: An overwhelmed Ethereum Network that caused fees to skyrocket to astronomically high amounts.
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For example, I checked how much fees were at 10:30 p.m. ET on Saturday night for a .eth blockchain domain name.
You may have seen Twitter users put these domain names in their Twitter handle. They're basically a way to change your crypto wallet address from a string of numbers into something more memorable.
Each .eth domain costs $5 for a one-year registration plus the associated gas fees. Sometimes, those fees can be as much as $50. Other times a couple hundred bucks.
Last night, the gas fees put a single .eth domain registration at more than $4,666.
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One cryptocurrency advocate noticed that from just the Bored Ape's NFT sale, approximately $100 million were wasted during the first hour of the "land" sale in gas fees alone.
As mentioned earlier, transactions can often fail when the Ethereum network is facing unusually high traffic. And last night, many people paid thousands in gas fees for transactions that didn't even go through.
Yuga Labs says it will refund users those fees, but it's unclear just how the company plans to do that. Also, Yuga Labs will ostensibly only cover the fees from failed transactions directly involving the company. If you're a user who was attempting an unrelated transaction, you can say goodbye to those thousands in lost fees.
Last night's debacle is just another example of how cryptocurrency, NFTs, and really everything related to the blockchain just isn't ready for the mainstream.
However, there was at least one winner from the Saturday night sale: Yuga Labs. The owner of the Bored Ape Yacht Club brand raked in $285 million from the NFT sale.
FAQs
Bored Ape Yacht Club caused Ethereum fees to soar to astronomical levels. $4,661 in fees for a $5 . eth domain purchase?! If you were trying to complete a transaction on the Ethereum network last night, you might have been taken aback by the ridiculously high gas fees you saw.
Why are Ethereum fees so high? ›
When demand is higher on the Ethereum network, ETH gas fees go up. The network demand and transaction complexity determines the cost of gas, which makes waiting around for low-traffic times a good way to save money on gas fees (generally Sundays, or at times outside of working hours in the U.S. and Europe.)
What happens to ETH gas fees? ›
The validator that processed your transaction receives the tip portions of your gas fee and the gas fees from all the transactions in the block. The base fees are “burned”—removed from circulation—to prevent ETH currency inflation.
How much have Bored Ape prices dropped? ›
The Bored Apes Yacht Club NFT collection experienced a significant price decline of over 90%, dropping from a peak of 120 ETH to just over 10 ETH. This decline reflects a broader waning interest in Ethereum-based NFT collections.
What happened with Bored Ape? ›
On April 25, 2022, the official Instagram account of the company was hacked and a phishing link was posted on it. As a result, four Bored Ape NFTs, along with ten more from related collections by Yuga Labs, were stolen with a total estimated worth of approximately $3 million.
Will Ethereum fees ever go down? ›
As a result of more blobs, the costs for these layer-2 networks to stash data on Ethereum will be significantly cheaper, and the reduction is likely to trickle down to users in the form of lower fees. But how exactly it will all shake out is still ambiguous, according to many Ethereum experts.
How do I reduce gas fees on Ethereum? ›
To reduce Ethereum gas fees, choose off-peak hours for transactions, batch similar transactions, use gas tokens and estimation tools, and explore Layer 2 solutions like Optimism. Whether you're an avid DeFi user, a DApp developer, or simply a casual Ethereum enthusiast, high gas fees are equally frustrating for us all.
Do you pay taxes on ETH gas fees? ›
Ethereum gas fees can be tax deductible, although in some cases they are not. This generally depends on whether the gas fee was part of a crypto transaction for personal or professional use. Gas fees can be used to adjust cost basis.
What is the average transaction fee for Ethereum? ›
Basic Info
Ethereum Average Transaction Fee is at a current level of 1.416, up from 1.051 yesterday and up from 0.5679 one year ago. This is a change of 34.71% from yesterday and 149.3% from one year ago.
Who pays Ethereum gas fees? ›
Gas fees are the transaction fees users pay on the Ethereum blockchain to conduct transactions (like sending or swapping ETH) and execute smart contracts. Users pay this fee in ETH and the network nodes earn a fraction of fees for validating transactions via Proof of Stake (PoS).
Bored Ape NFT price history
At the time of its launch in April 2021, Bored Ape Yacht Club mint price would be 0.08 ETH (which was equivalent to less than 200 USD at the time). In less than 12 hours, the collection would be completely sold.
Which Bored Ape is worth the most? ›
Bored Ape Yacht Club #8817 –ETH 2089 ~ $3,408,000
Bored Ape Yacht Club #8817 is the most expensive monkey sold, going for a price tag of $3,408,000 at auction.
Why is Bored Ape Yacht Club dropping? ›
The price floor refers to the lowest asking price for an NFT within a collection, and its decline suggests a decrease in overall demand. This trend is particularly evident among collections minted on the Ethereum blockchain, where February's total NFT trading volume fell over 10% compared to January.
Are Bored Apes still worth it? ›
Bored Ape NFTs have absolutely plummeted in value, dropping to multi-year lows this month. The value of this once-booming collection of JPGs of lethargic simians, which sold for millions of dollars just a couple years ago, has cratered, selling for as little as $52,000 worth of Ethereum this month, Decrypt reports.
Who is behind Bored Ape? ›
Bored Ape Yacht Club is created by Yuga Labs, a notorious digital collectible firm co-founded by Wylie Aronow (Gordon Goner), Greg Solano (Garga), Kerem (Emperor Tomato Ketchup) and Zeshan (No Sass).
Why is Bored Ape Yacht Club so expensive? ›
A Bored Ape Yacht Club NFT's worth is heavily influenced by its scarcity and uniqueness. Each NFT is distinct from the others because of characteristics like fur colour, attire, accessories, and backdrops. Collectors are frequently more interested in and pay more for rarer combinations of these characteristics.
Is Ethereum fees high? ›
Ethereum Average Transaction Fee is at a current level of 1.416, up from 1.051 yesterday and up from 0.5679 one year ago. This is a change of 34.71% from yesterday and 149.3% from one year ago.
How to buy ETH with less fees? ›
You can buy Ethereum directly from another person over the web. Crypto Exchanges are the safest places for buying Ethereum. You can use Blocktrade as a cheap, secure, and global exchange to buy ETH. You don't need to pay any trading fee while using Blocktrade exchange.
Why are ERC20 gas fees so high? ›
This is due to the fact that smart contract executions are far more taxing on the network than moving ETH between accounts. Contrary to popular belief, the size of the transfer (in ETH terms) has no impact on the cost of the transaction, only the amount of computational work required for the transaction has an impact.
Are Ethereum fees higher than Bitcoin? ›
Bitcoin is an investment and a payment method, and so is Ethereum — but Ethereum can support financial software, too. Bitcoin and Ethereum are created through very different processes — mining vs. staking — and have different environmental footprints. Ethereum fees have tended to be higher than those for Bitcoin.
