Ethereum, the second largest Cryptosoft by market capitalization, has experienced in recent weeks one of its greatest boom periods, driven by the rise of decentralized finance. However, the increase in transactions in the Ethereum chain has led to an increase in commissions for the chain. This is why Changpeng Zhao commented in today’s Tweet that the exchanges will have to adjust commissions for Ethereum sooner or later.
Vitalik Buterin will stay away from DeFi for the time being
Commissions at the Ethereum
The big news of the crypto world during this year 2020 has been, without a doubt, the rise of decentralized finance. After several years of promise, DeFi has finally increased its value exponentially in the last three months. A fact that has driven other crypto-currencies such as Ethereum.
And that is, even though Ethereum is not in itself a project dedicated to DeFi. The architecture of its Blockchain is designed for the creation of intelligent contracts. Thanks to this, the ETH chain is one of the most popular for the development of different decentralized finance projects. This increases the demand for Ethereum and therefore its price.
Although this might seem positive at first, as it would mean a greater adoption of cryptomon currency. The truth is that, as the number of transactions in its Blockchain increases radically. The commissions (gas) charged for each transaction in Ethereum have also skyrocketed. This has not only affected users, but also exchanges as Changpeng Zhao commented:
„The high gas commissions of the ETH network are causing problems in most exchanges, with losses of between 10 and 20 dollars for each withdrawal. We will have to adjust our withdrawal rates sooner or later.
With this message, Changpeng Zhao would be making visible a problem that is already affecting cryptoactive exchanges. For, by covering the transaction fees for his clients‘ withdrawals, the platforms are losing money. He is facing the difficult situation of having to increase his commissions in order not to incur costs due to the situation of Ethereum.