Crypto Conversation: The $3.9 Million Mistake

Crypto Conversation: The $3.9 Million Mistake

What’s hot in crypto?

The cost of transaction fees. Let me explain, here we’re looking at something different from usual. We’re tracking the cost of transaction fees on Ethereum since the beginning of 2020. It’s a recap of the major decentralized finance governance token launches that have made headlines in the past few months and how the fees have shot up and down and up. 

How has the fee price changed?

Ethereum “gas fees” — or transaction fees — have reached striking new highs, as new decentralized finance protocols require more complex transactions. Increased demand fueled by “yield-farming” has also affected fees. Yield farming is the attempt to get crypto assets to produce the most returns possible, often by moving assets around and trying to spot the highest annual percentage yields. 

Remember, fees on Ethereum are measured in “gas.” More complex transactions require more gas, and the cost of that gas goes up and down as demand goes up and down. These fees go directly to miners, who will prioritize transactions with a higher fee. Mining is that arduous task of essentially verifying past cryptocurrency transactions. It sometimes pays off well, but depends on carrying out the tedious work, and getting lucky, thus higher fees typically means higher pay off for the miners.

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