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- Ethereum gas fees and network congestions issue are a bigger concern
- The concerns on Ether blockchain has been a boon for its rivals
- The primary way to alleviate competition in the market is to increase the block size
Ethereum is the second most largest crypto asset in terms of market capitalization as per CoinMarketCap. SInce the beginning of this year, ETH has performed tremendously and achieved a new milestone. However, although the blockchain continues to grow, it has concerns related to high gas fees and network congestion. A few weeks ago, following the concerns some of the rival blockchains like Solana and Avalanche were gaining traction. However, the gas fees issues were huge for the DeFi industry, the first ever smart contract Layer-1 blockchain is extremely expensive to use.
Due to the concerns, simple token swaps on the DEXs could cost hundreds of dollars. Notably, it is not a particularly new phenomenon, as back in 2017, CryptoKitties, a fun little game went viral and had wreaked similar havoc on gas fees. However, later the fees eventually subsided. But now it seems like the similar scenario is back with a vengeance.
Can Solana and Avalanche compete with Ethereum?
Throughout this bull market since the beginning of this yearEthereum gas fees have remained a painful topic. ETH coins certainly have witnessed spikes and drops but the average gas has never been so high on the path. Notably, the fees issue is emerging because more users pile into the network each day.
However, the concerns on Ether blockchain has been a boon for its rivals. Especially Solana and Avalanche, which pitch an equally rich crypto experience as Ether. Moreover, these blockchains have prohibitive transaction costs. Furthermore, these blockchain projects have made good on their promises.
On Solana, a batch of the latest transactions costs only a fraction of a penny. Simultaneously, on Avalanche the average transaction cost is about only 58 nAVAX, where 1 nAVAX is equals to 0.000000001 AVAX.
Users on Avalanche are not happy
If a fresher in the cryptosphere enters, they will face no difficulty in choosing a chain. Indeed, spending fractions of a penny rather than $100 for the same service is no-brainer. However, users on Avalanche have been observed being unsatisfied. Users on social platforms have deemed that although Avalanche has an impressive network speed, the network is still expensive when compared to Polygon and KuCoin. Hence, the blockchain might be good for someone, but for users making thousands of transactions it is not an option.
However, like Ethereum Avalanche also has a scaling solution, as the devs have also deemed that the network cannot provide thousands of transactions for lower fees. Notably, Subnets, the sidechain on the AVAX ecosystem, batches the activity away from the network’s mainnet to maintain a lower cost.
How to alleviate this competition?
Following the fees and network congestion, many experts in the cryptosphere considered these blockchains as fee markets. On these networks transactions compete for block space, which when filled up due to an increase in activity the markets become more competitive.
Notably, the primary way to alleviate such competition in the market is to increase the block size. Indeed, Solana and Avalanche have already increased their block size. On the other hand, increasing the block size calls centralization risks. If the network’s block size increases, then it’s mining operations will have much higher hardware demand to work with a ton of data. Ultimately, small players will not be able to enter as node operators and validators.
Noting all the factors, experts cited that as blockchain technology will underpin all financial markets, the future will become more expensive. Hence, it is necessary to address these issues.
