Are you a traditional player shifting to exciting innovations like blockchain gaming, online gambling, and more? If that’s the case, you might have, at one point in time, be put off by the exorbitantly high Ethereum Gas fees when playing some of the best crypto games.
Indeed, how could you wager confidently in an environment prohibitive and charging over $50 to confirm a single transaction?
Of course, the state of affairs in blockchain and crypto may be markedly different from traditional platforms.
Still, crypto gambling and blockchain as a disrupting force is evolving and gradually leveling out some of the earlier impediments that bogged down progress. A big part of earlier troubles facing crypto gambling platforms and network users was transaction fees.
In Ethereum circles, this is “Gas,” which must be paid to “push’ a transaction across its channels. Gas is payable to miners who, in turn, approve transactions, adding them to a block. All fees per block are awarded to the successful mining pool and reimbursed to individual miners.
This is an ingenious way of rewarding participation and bulwarking the network considering the open nature of the ledger.
Ethereum Gas and Scaling Troubles
Transaction fees, however, are a factor of scalability and network throughput.
Ethereum can only process 15 transactions per second at best. As a result, there is stiff competition for confirmation among market participants forcing miners to bid higher, accepting only transactions with higher fees.
It is the case because every block can only handle a given size. The scramble for this limited block size is what makes Gas rise.
In early May 2021, due to the proliferation of doge-coin meme coins aping Dogecoin, the average Ethereum Gas fees stood at over $65.
It made using Ethereum prohibitively expensive, forcing users to opt for alternative solutions or quit altogether.
Three Reasons Explaining why Transaction Fees is Falling:
Gas fees have since tapered, falling to around $5. There are several explanations, including:
- The drastic reduction in the number of transactions being processed in Ethereum. Typically, Ethereum processes 1.5 million transactions every day—at least that has been the average in the past few months. However, there has been a cool-off. For the better part of May and through to June, Ethereum processed comparatively low transactions. Since, as mentioned earlier, Gas fees are directly proportional to the transaction count, analysts say the decrease contributed to reducing Gas fees to reasonable levels. Decrease in transaction count notably coincides with cooling DeFi and NFT activities, as data shows.
- Part of this could be because of the increasing demand for Layer-2 solutions and platforms. Unlike any other point in time, there are more Ethereum compatible platforms–a net positive. This means it is easier for developers to migrate to competing, more scalable, and cheaper networks. One that stands out is the shift to Polygon. The platform is compatible with Ethereum and offers Layer-2 solutions while also providing projects with the necessary infrastructural base for launching operations. Flashing with the fall of Gas fees is a pickup in activity in Polygon. Reports show that Polygon now hosts over 350 projects and concurrently manages over $6.5 billion of assets. The Proof-of-stake platform handles far more transactions than Ethereum. Encouragingly, it is projected to rise in the days ahead as the number of Layer-2 solutions increases. Besides Polygon, options such as Arbitrum, ZK-Rollups, and Optimistic Rollups—once all are in operations—will highly likely drive down the cost of transactions, scaling the network as a result.
- However, perhaps in a demonstration of innovation and flexibility among miners, analysts pin “crashing” Gas prices to the wide adoption of flashbots. Traders are increasingly opting for flashbots instead of Priority Gas Auction (PGA) bots. Flashbots is an organization looking to reduce miner extractable value (MEV) effects on Ethereum and other blockchains. Diverging from PGA objectives, flashbots are tailored to minimize Gas fees. Already, estimates place adoption of Flashbots by miners at over 50 percent, which means they dominate more Ethereum hash rates. This flashbots intervention is widely relieving for the entire network considering that, despite hopes of EIP-1559, the word is that the upcoming London upgrade may not be enough to keep Gas fees low permanently. At the same time, mining pools are already readying for the ETH-burning regime by deploying sophisticated MEV programs to serve their bottom lines.
Why Low Ethereum Gas Fees is HUGE for Online Crypto Gambling?
A mark of blockchain adoption shows in gaming and the depth of integration. Therefore, blockchain transaction fees play a huge part in determining the speed and level of adoption.
Ideally, transacting on the blockchain should be negligible and lower than in traditional circles. The good news is, online gambling platforms are offering some of the best crypto games like BC Game have gamers in mind.
BC Game runs a Lightning Network (LN) node allowing users to play any of their immersive online gambling games cheaply using BTC minus the inconveniencing high transaction fees.
Gamers can easily and quickly deposit and withdraw BTC without worrying about losing all or a portion of winning to transaction fees.
Combining BC Game‘s LN node and falling Gas fees in Ethereum lead to enhanced user experience and confidence, going a long way in highlighting the positives of blockchain as an intervening layer beneficial to the expanding online crypto gambling space.