According To Coin Metrics’ Statistics, Ethereum’s Transaction Fees In May 2021 Will Break The Current Monthly Record Of Us$722 Million Sometime Today, And There Are Still Two Full Weeks Before The End Of May.
If This Trend Continues, The Ethereum Network’s Second-quarter Transaction Fee Revenue Will Exceed Its First-quarter Record By The End Of May And Is Expected To Reach $1.7 Billion.
Gas Revenue In U.s. Dollars Is The Product Of Transaction Costs And The Unit Price Of Ethereum. Due To The Current Strong Demand On The Network And The Eth Price Setting A New Record, The Total Transaction Fee Of Ethereum Has Never Been Higher.
The Previous High Point Of Transaction Fees Was Three Months Ago, In February 2021.
Whenever Someone Uses The Ethereum Network To Transfer Funds Or Uses Smart Contracts (Automatic Codes That Interact With Them, Such As Bidding On Nfts In Auctions Or Exchanging Assets On Decentralized Exchanges), Users Must Pay A Certain Fee, And Ultimately Miners Will Receive A Freshly Baked Eth Fee, Which Is An Additional Subsidy.
Transaction Fees Will Vary Based On Network Congestion. The Greater The Transaction Volume Of The Entire Network, If Users Are Willing To Pay A Premium, The Gas Fee Of The Transaction Will Be Pulled Higher.
Therefore, this month’s record transaction fees show both the usage of the entire network and the price of Ethereum. According to Nomics data, ETH reached an all-time high a week ago, breaking through $4,300.
If Ethereum Were A Company, Just As James Wang, An Investment Analyst At Qianzhou, Imagined, Then These Revenue Figures Would Be Very Eye-catching. Wang Pointed Out: “Calculating The Annual Revenue Of Ethereum Based On The Data In April, It Reached 8.6 Billion U.s. Dollars, Which Is Equivalent To Amazon Web Services In 2015.” In The Next Five Years, Amazon Web Services Revenue Increased By 575%. Fan Enthusiasts Also Hope To Achieve This.
But It Depends On Whether Ethereum Can Expand More Businesses. Each Block In The Ethereum Network Can Only Handle A Limited Transaction Volume, And The Network Is Close To Its Capacity Limit. The New Record Of Transaction Fees Will Not Depend On More Transactions, But On The Rise In The Price Of Eth And Users’ Willingness To Pay Higher Gas Fees To Ensure That Transactions Pass Quickly.
Ethereum’s July Network Upgrade Is Called The “London” Upgrade And Will Include Improvement Proposal (Eip) 1559. This Is A Controversial Plan That Will Automatically Set The Gas Price And Then Burn The Fee Instead Of Paying To The Miners. In This Way, The Purpose Of Reducing The Supply Of Ethereum, Increasing Market Demand, And Eliminating Certain Network Congestion Is Achieved.
Although The New Upgrade Will Reduce A Certain Percentage Of Transaction Fees, The Real Change Will Not Be Realized Until The Full Implementation Of Ethereum 2.0.
Unlike Current Networks That Rely On High-energy-consuming Hardware For “Mining”, The New Proof-of-stake Network Will Protect The Network By Allowing Users To Lock Their Tokens In Smart Contracts. Ethereum 2.0 Promises To Drastically Reduce Congestion And Allow Thousands Of Transactions Per Second Instead Of The Current Network’s 15 Or So, Which Will Reduce Transaction Costs To A More Reasonable Level.
However, Before The Realization Of Ethereum 2.0, Miners Will Still Enjoy Record Fee Income During The Network Transition Period.