– Gas fees on the Ethereum network have soared to levels not seen since March 2023
– Recently driven by the growing interest in a new experimental token standard known as ERC-404
– Ethereum gas prices soared to an average peak of 70 gwei on February 9, equivalent to $60 for a standard transaction
– Peak gas costs even reached as high as 377 gwei, a level not seen since May 12, 2023
– The primary catalyst has been the hype surrounding the ERC-404 token standard
– Several projects, including Pandora and DeFrogs, have generated over $600 million in trading volume in the past week
– ERC-404 aims to link ERC-721 non-fungible tokens (NFTs) with ERC-20 tokens, enabling the creation of fractionalized NFTs
– The standard is currently unofficial, but there are rumors of a proposal to address this and unlock extra utility such as staking
– Uniswap has driven a surge in Ethereum network activity, largely driven by increased usage of the decentralized exchange protocol
– Ethereum co-founder Vitalik Buterin advocates for a gas limit increase, suggesting a limit of around 40 million
– Gas fees on the Ethereum network have reached peak levels, driven by the growing interest in the ERC-404 token standard.
– On February 9, Ethereum gas prices soared to an average peak of 70 gwei, equivalent to $60 for a standard transaction, with some reaching as high as 377 gwei.
– The hype surrounding ERC-404 has led to an increase in trading activities, particularly with projects such as Pandora and DeFrogs.
2. ERC-404 Token Standard
– ERC-404 aims to link ERC-721 non-fungible tokens (NFTs) with ERC-20 tokens, enabling the creation of fractionalized NFTs.
– This allows multiple users to collectively own a single NFT and utilize their share for trading or collateralizing loans.
– The new standard seeks to combine characteristics from both sectors, allowing developers to mint fractionalized NFT collections that users can trade in open markets like Uniswap.
3. Ethereum Network Activity
– The surge in Ethereum network activity has been driven by increased usage of the decentralized exchange protocol Uniswap.
– A significant portion of Ethereum burned during this period resulted from activities on Uniswap, largely due to the trading volumes generated by projects such as Pandora and DeFrogs.
– Ethereum co-founder Vitalik Buterin has advocated for a modest gas limit increase, suggesting that it could lead to a limit of around 40 million, citing the longest period without an increase in the protocol’s history.
4. Optimization Efforts
– The developers behind Pandora are actively working on optimizing gas costs associated with ERC-404 transactions to encourage adoption and integration.
– It has been noted that an ERC-404 token consumes approximately three times more gas than an average NFT transaction, prompting efforts to build a more optimized and compliant version of the standard or potentially ignore it.
– The heightened interest in the ERC-404 token standard has led to soaring gas fees on the Ethereum network and a surge in trading activities, particularly on platforms like Uniswap.
– Efforts to optimize gas costs associated with ERC-404 transactions and the potential for a gas limit increase on the Ethereum network are key areas of focus in addressing these challenges.
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