Over the last twelve months, there have been an impressive number of Ethereum based transactions across online crypto casinos and other platforms. Very popular in the casino world as a payment method, it’s also started to dominate in other sectors as well.
Ethereum has been at the top when it comes to transaction fees across all proof-of-stake (PoS) blockchains. It’s not been alone though, as TRON has also been part of this, the two cryptocurrencies making up a whopping 88% of the global transaction fees.
If you’re wondering exactly what’s been happening and why, let’s take a look.
Average fees for Ethereum
Fees for a crypto always refer to the amount in USD that users add to any transfer on the Ethereum network. This value is linked to the traffic on the network itself. This means that when there is a high number of transfers on the network, congestion occurs. Validators have a specific capacity to process transfers so some may end up being stuck in the queue for longer.
This means that any users who want faster transactions may attach higher fees than normal to get priority. Because of this, the cost of fees increases as users compete against one another to get better transaction times. Casino users are particularly fond of using this method to access faster payouts after winning. And, with the popularity of crypto casinos growing, it’s no surprise that an increase in traffic is driving up fees.
The opposite occurs in low periods where there is little or no traffic. Users have no need to increase fee payments to get priority, so there is traditionally a drop in these fees. By looking at the value of fees on a blockchain such as Ethereum, it’s possible to get an idea of the activity level on a specific network.
Topping the fees
Current reports look at some 200 PoS and smart contract blockchains. Across these 200, two cryptocurrencies stand out, Ethereum (the world’s second-largest crypto) and TRON. In a strange turn of events, 88% of all transaction fees have come from just these two currencies. What this means is that the likes of Ethereum are still increasing their share at an ever-growing rate.
And yes, Ethereum is still on top leading the way with 57% of these transactions over TRON’s far off the mark, 31% second place.
There are a number of main challenges facing most PoS blockchains though. And these include inflationary schedules of supply, supply indicators not being disclosed, underperforming tokenomics and an oversupply of blockspace.
Competition time
While Ethereum is currently at the top, this is not to say that everything is smooth sailing. Recently, Ethereum transaction fees did take a dive, reaching their lowest point in 2023 earlier in September. Specifically, fees dropped to $1.15 per transaction as observed by the online analytics firm Santiment. At the same time, TRON actually had twice the trading activity of Ethereum, continuing this ongoing rivalry from throughout this year which is why it’s important to check up-to-date crypto market data.
Transaction fee worth
At the beginning of 2023, Ethereum had transaction fees in the region of $700 million being generated. Even in second place, TRON is off the pace here. That network had a high of just $282 million in the first half of 2023. If we’re going for the full contrast, Bitcoin only generated $80 million in fees indicating just how far ahead both Ethereum and TRON really are in the industry at this time.
Despite a drop in transaction fee cost, it’s often a predictor that the crypto is finding its boom. This can actually invigorate the currency sparking an up-tick in activity from investors happy to make use of lower fees again.