The popular decentralized exchange Uniswap is starting to become unusable due to high transaction fees. The fees are rising with the popularity of DeFi pools and yield farming.
Ethereum typically struggles with high gas prices during a bull market. This was pretty evident in 2017 when the collectibles dApp CryptoKitties managed to clog up the network.
While Ethereum devs say that the new Eth 2.0 will be cheaper and faster, other protocols like Tron and Polkadot claim that they are solving the high-fee issue.
Uniswap Gets Popular
As BeInCrypto reported recently, Uniswap registered a massive increase in trading volume in the last few months. On the 10th of August, Uniswap’s daily trading volume peaked at $250 million, setting a new record for the exchange.
Uniswap is gaining traction because anyone can list their token there. Up until now, new projects required large sums of money to pay exchanges for listings.
As the DeFi boom continues unabated, plenty of legitimate projects are able to access millions of dollars in liquidity just through Uniswap.
The Gas Price of Fame
As with any Ethereum-based platform, fees are a major sticking point. Due to the increase in trading volume, Ethereum’s network fees have become notably more expensive. This raises concerns, since if not addressed soon, many projects may become financially unviable.
The problem comes just as Ethereum is releasing its Medalla testnet, which, in theory, will bring fees down. But Ethereum is not alone. Other protocols are ready to take advantage of discontented users.
If retail investors can’t join the fray, the issue may halt the impending bull run. However, it’s also creating several new businesses around it, like Dharma, whose value proposition is precisely to “pay zero gas fees” on Uniswap.
Relatively newer blockchains like Algorand and Solana also have low-gas price DeFi projects in the works. One that’s gathering a lot of buzz at the moment is Serum, built on top of Solana.
It appears that gas price projects are now possibly an investment class of their own. The network that offers the cheapest, reliable, and fastest transactions may just win the multimillion decentralized exchange race.
Tony has worked for several financial companies in London during the last seven years, gaining experience in traditional finances and trading. Passionate about direct democracy, digital rights and privacy, he has been involved with cryptocurrency since 2013.
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