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29 September 2020

Ethereum scalability issues exposed as high gas fees stall DeFi boom

Ethereum scalability issues exposed as high gas fees stall DeFi boom

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Furthermore, in the wake of this market turmoil, Ethereum network transaction fees have surged, recently achieving an all-time high, thanks in part to the influx of many new on-chain transactions initiated by various decentralized finance protocols that have made their way into the crypto domain in recent months.

And while DeFi has provided investors with financial products through decentralized exchanges by way of various lending protocols that reward liquidity providers, this very facet of the technology has resulted in the creation of an undesirable environment of high transaction fees that, in turn, has gravely affected the value of many tokens.

That being said, there are several secondary reasons that have exacerbated the current situation, forcing Ethereum "core devs" to hold a virtual meeting on Sept.

He then went on to state that if network congestion is not the only reason for this unprecedented rise in transaction fees, then the only way to get around the problem would be by either allowing multiple fee markets or creating a new fee pricing structure that could reconcile DeFi systems with network mining and/or staking functions.

One of the main concerns to emerge is the question of how such high transaction fees impact network usability

However, an increasing number of people are waking up to the fact that Ethereum and smart contracts are technological foundations that can be used for things beyond payments and money transfers.

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