Since at least 2014, when Ethereum Network co-creator Vitalik Buterin declared in relation to Bitcoin, “The ‘Internet of Money’ should not cost $0.05 per transaction,” high transaction fees have been a thorn in the side of investors and blockchain projects. It’s a little ridiculous.”
In November 2021, authorizing a token so that it can be exchanged on Uniswap can cost as much as $50 in Ether (ETH), depending on the time of day.
Even layer-2 solutions, which were billed as the protocols that would help alleviate the fee problem, have been unable to avoid the high-cost curse of crowded networks as more people join the bitcoin ecosystem.
isnt arbitrum supposed to be cheap lol what a joke pic.twitter.com/v839tZ4nch— satsdart (@satsdart) November 2, 2021
A rising number of users are bridging assets to lower-cost Ethereum Virtual Machine (EVM) compatible networks as a result of chronically high Ethereum fees. Since the beginning of October, according to Dune Analytics, the total value locked on bridge procedures has been on the rise.
The Ronin bridge has become one of the more popular protocols in the last month, thanks in part to Axie Infinity customers shifting assets to the cheaper fee platform, as illustrated in the chart above. The popularity of Axie Infinity may be seen in the graph below from Token Terminal, which shows protocol income.
PancakeSwap (CAKE), a high TVL DeFi protocol on the Binance Smart Chain with much cheaper transaction costs than Ethereum, is the third-ranked protocol by revenue. The majority of the top TVL gainers over the last week are also protocols that are featured on Ethereum competitors or provide multi-chain capabilities in side-chain contexts.
Yield, Avalanche, Abracadabra.money Multi-chain or Ethereum side-chain compatible networks like Yak, Benqi, SpookySwap, and Loopring have all seen a big increase in TVL in the previous seven days. Unless something is done about the high transaction costs on the Ethereum network in the near future, the trend of liquidity migrating to other blockchains will likely continue.