One of the biggest short-term roadblocks facing wider acceptance of decentralized finance and crypto, in general, is the unpredictable and frequently expensive fees associated with doing anything more than moving your coins around. DeFi has gone through two distinct hype cycles in the past six months, first last summer and again in February, where usage shot up, volume was way above normal, and in-kind, Ethereum gas fees skyrocketed. These high fees threw the breaks on the DeFi hype pretty quickly since it does not differentiate the fees based on how much you\u2019re sending. An average user participating with only a couple hundred dollars worth of crypto faced the same fees as someone moving millions. This made even just swapping tokens on Uniswap nonviable for most people, let alone interacting with more complex smart contracts like Aave or Compound. While Ethereum is currently making the transition to Eth 2.0 and proof-of-stake, that won\u2019t realistically be live for another two years, if there are no delays.Source: Bitinfocharts.comThere are other projects like Loopring and Polygon (formally Matic Network) that are building layer-2 solutions that make transactions off-chain and thus have nearly no fees, but the Ethereum community itself is actively attempting to solve this as well. A step in the right direction is the recently passed Ethereum Improvement Proposal (EIP) 1559, which is planned to be implemented in July. The biggest feature of this change is the introduction of a \u201cbase fee,\u201d which is automatically set by the Ethereum protocol based on usage and demand, aiming for 50% network utilization and drifting up or down to meet that goal.This allows for more stable gas fees as we will always know what the base fee currently is. This differs from the current \u201cauction-style\u201d fees, where users are forced to outbid each other for their\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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