Ethereum Network Use Hits a New All-Time High

According to a recent report by Delphi Digital, the total gas used on the Ethereum blockchain has reached an all time high and it seems like this the figure is set to increase.

Gas is the measure used to price fees on the Ethereum blockchain, and the overall use of gas on the network has been rising since the beginning of 2020.Gas Used vs. Max Gas Possible.

On the Ethereum network, transaction and smart contract fees are determined by the gas required and price of gas, a mechanism that allows the fees to be dynamic and somewhat detached from the price of Ether.

USDT and decentralized exchanges take the leadWhile the gas usage is at an all time high, the sheer number of transactions on the Ethereum blockchain is far from the all-time high of 1,349,890 transactions reached on January 4, 2018.This means that the increase in the total gas usage figure comes from a higher use of smart contracts which are more complex and therefore require more gas.

According to ETH Gas Station, the usage is coming mostly from USDT, with around $1.61 million spent just in Ethereum gas fees.

Higher transaction fees and gas limitationsThe increase in usage on the Ethereum network has led to an increase in average transaction fees, as miners prioritize transactions with higher gas.

The amount of overall gas used is restricted to the block gas limit set by miners and this serves to limit the size of the Ethereum blockchain by determining how many transactions fit in a block.

The gas used in each block has been increasing steadily, rising from 69% in January to 95% at the time of writing and also nearing the currently defined limit.

Given the increased gas usage currently seen on the network, and the associated block gas limit, it is possible that Ethereum will be faced with network congestions in the near future due to a number of factors.

If gas usage rises to the block limit level, users will have to compete with higher gas prices in order to execute transactions and smart contracts.