Ethereum: Ponzi scheme or genuine opportunity? Users wary as gas fees skyrocket
Ethereum (ETH) is seeing an unmatched spike in inactivity. From institutional adoption to rising traction, and whatnot. Given the demand, Ethereum (ETH) network participants raised $2.48 billion in fees compared to $1.7 billion one year ago.
Are you happy now?
Ethereum’s bullishness throughout 2022 resulted in a good spike in trading and transaction volumes, as well as high inflows from investors. The accumulation trend was running hot and that led to a profitable month for Ethereum miners as well. In fact, Ethereum miners’ revenue hit an ATH, as seen in the graph below.
What led to this hike? Apecoin owners got Otherdeed NFTs, which likewise led to more ETH getting burned. This signified more demand. APE owners had to send their cryptocurrency via the Ethereum (ETH) network to the relevant smart contract and the network experienced a huge load during those hours.
As participants were eager to get their hands on an Otherdeed NFT, they ended up in a gas war. This shot up transaction costs, earning Ethereum miners more than $87 million in just an hour.
Consider this – They made $87,664,337 within a single hour. Indeed, they were happy with this revenue.
For context, in total, $172 million in additional transaction costs would have been paid during the gas war. At press time, ETH’s average gas price stood at 52.55 GWEI.
One war to another?
The hike in the gas fee, obviously, would anger a certain chunk of the crowd. Following this event, ETH users paid a median fee of $4,830 per transaction over a one-hour window.
#Ethereum users paid a median fee of $4,830 per transaction in the past hour….ummmm okay.
— Rafael Schultze-Kraft (@n3ocortex) May 1, 2022
Different ETH users shared their dissatisfaction with the same. For instance, a fellow user criticized Yuga Labs for starting a gas war.
You wrote a terribly unoptimized contract, created a gas war, lied about dutch auction mechanics to pump your own narrative, and hid how many wallets were eligible
Maybe get a solidity dev before you go around trying to create BSC 2.0?
— foobar (@0xfoobar) May 1, 2022
In addition, another fellow ETH enthusiast called ETH a “Ponzi scheme” in a 1 May tweet.
Like I said… #ethereum is the kind of ponzi scheme where the fees rise as less people are willing to validate and more people leave… It is a feed forward cycle only realized when the validators max out while remaining populations use/validate more efficient coins like #hathor
— AcornHoarder (@ZombiLiving) May 1, 2022