Ethereum network fees skyrocketed tenfold to as much as 318 Gwei on November 8 with a simple transaction nearing the level of $10 at one point. This, paired with the ongoing crypto market crash, has triggered a decrease in the coin’s price to below the level of $1,200. The prices of other tokens have also dropped sharply over the past 24 hours.
As a result of the latest spike, transactions carried out via decentralized crypto exchange Uniswap transactions reached the cost of $76, according to data collected by industry site Trustnodes.com.
Industry observers note that the latest spike has been fueled by a wave of panic selling started after major crypto exchange Binance announced it will take over rival FTX. Binance CEO Changpeng ‘CZ’ Zhao said that the move would allow to relieve pressure on FTX’s liquidity.
“This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch,” Zhao tweeted.
As of 10:40 a.m. UTC, ethereum was priced at only about $1,171, a solid drop from the token’s top 24-hour price of some $1,565, according to data released by CoinMarketCap.com.
In crypto, gas fees stand for compensation used to cover work computed to complete transactions. Gwei is the smallest unit of ethereum, and it is used to pay gas fees. Gwei is short for Gigawei, and ETH 1 is equivalent to 1 billion Gwei.
As of 10:40 a.m. UTC, the average transaction carried out via the Ethereum blockchain was priced at an average of 86 Gwei, per Etherscan.io data.
Prior to the blockchain’s 2021 London upgrade which included Ethereum Improvement Proposal (EIP) 1559, Ethereum comprised fixed-sized blocks.
“In times of high network demand, these blocks operated at total capacity. As a result, users often had to wait for high demand to reduce to get included in a block, which led to a poor user experience,” according to the community’s site.
The upgrade introduced variable-size blocks to the blockchain, with each block assigning a target size of 15 million gas, but also allowing the size of blocks to expand or decrease in accordance with network demand up until the block limit of 30 million gas.