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.
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:
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.
Otherdeed NFT minting has resulted in 55,815 ETH being burnt so far, a whopping $160 million. NFTs have been responsible for more than 70% of all ETH burnt over the past week.
ETH price slides
Ethereum prices hit a monthly low of $2,740 over the weekend but have managed to claw back 2.4% over the past 24 hours.
As a result, the asset was trading at $2,860 on the morning of May 2. ETH prices are down-trending at the moment, having lost 17% over the past month and 41% since the November all-time high above $4,800.