Ethereum’s fees rose yesterday to as high as 500 gwei, which translates to $40 – $100 per simple contract interaction.
Our fun ‘test-running’ sushi therefore was met with calculations of whether any potential dividends would cover fees.
So the result was we left everything as it was, which presumably is good news for sushi, but maybe not such good news for yETH.
We defo wanted to ‘testrun’ that because it’s a pretty cool new bot that would have been hard at work for us, yet it would have cost us $20, so we thought to just wait.
That’s good in a way because price has moved against eth, and it has done so because people are waiting for fees to get a lot lower before getting in on the action.
Meaning what we’re seeing now has less to do with stocks or bitcoin and more to do with ethereum miners refusing to raise the gas limit.
Also as with the lockdown thing here too there may be pent up demand and a V recovery because we still want that yETH, we’re just not gone pay miners what is either an unreasonable cost or one that doesn’t add up when considering investment risks and rewards.
It is probable others also planned and still plan to do things, but they’re just waiting, including individuals who maybe wanted to put more cash on eth to send it to one of these dapps.
As they would have seen the rise in fees, on balance they probably thought to just wait as well, with that resulting in fees now to around 200 gwei or circa $20 per simple interaction.
Still high but at least its going down rather than up, with it unclear just how many of these transactions are bots and specifically what we’ll call business bots.
So that’s liquidators or arbitragers or market makers who see fees as just a business cost and who might not have the luxury of waiting because the arbitrage opportunity might go.
Just how much business they get however depends on people doing things, so if everyone is just waiting, then those bots might have to wait as well.
Meaning as with bitcoin, we might see a zig zag in fees as once they get too high people just wait because then they get lower, something that also means high fees paying for security is clearly a flawed concept.
Once they get lower people can defi again, with 100 gwei probably being the most that most people can bear.