Ethereum Gas Fees Spike to New Highs on Latest NFT Hype

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There were many disgruntled Ethereum users over the weekend following a Yuga Labs nonfungible token (NFT) launch which caused gas prices to surge to new highs.

Over the weekend, the firm behind the wildly popular Bored Ape Yacht Club NFT collection, Yuga Labs, launched a new land title collection called Otherdeed for its Otherside Metaverse.

The NFTs could be minted using the project’s APE coin , but they also required ETH to pay the gas fees. Overwhelming demand caused the average cost of an Ethereum transaction to surge to over $400 at the time according to Etherscan. Network fee tracker, BitInfoCharts, reported that average fees spiked to an all-time high of around $200 on May 1.   

Yuga Labs apologized for its disruption of the Ethereum network and suggested an alternative,

“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale.”

However, some industry observers pointed out that this could have been avoided, to begin with:

TLDR: Yuga had bad devs that couldn’t code a contract properly. This cost people $100m in gas. Then a VC wrote their apology blaming Ethereum and announcing a new ETH killer. — James Spediacci (@JamesSpediacci) May 1, 2022

Not all bad news

The good news is that Ethereum transaction fees quickly returned to normal today, with Etherscan reporting around $3 per transaction on average at the time of press.

Another positive for the network is that it became deflationary as the amount of ETH burned through the EIP-1559 mechanism also surged to an all-time high.

During peak demand, more than 70,000 ETH, or over $200 million was burned which pushed issuance into the deflationary territory by as much as 18%.

Currently, the ETH burn rate is around 6,000 per day or around $17 million according to the Ultrasound.Money tracker . Issuance has returned to an inflationary status but is predicted to become deflationary again once ‘the Merge’ ushers in proof-of-stake and the end of the mining process.  

71,718.72 $ETH burned 
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