Ether transaction fees increased by over 35,000% in the past year, forcing one social media tokenization project to close down.
An Ethereum-based project has been forced to cease development due to rising gas prices, as the cost of transacting on the blockchain continues to push new highs.
The official Twitter account for social media token project Unite announced on Feb. 10 that the project was no longer in active development, adding that the original idea for the project had been rendered unfeasible by the recent gas price spike. The average cost of using Ethereum increased 35,600% since January 2020:
“We are unfortunately no longer actively developing Unite. Gas prices mean the original idea for Unite isn’t feasible and after several months of work and many conversations we’ve decided against building a social token platform on a L2. Thank you for the support!”
Ethereum transaction costs hit new highs of $25.10 on Feb. 5, before receding to $16.40 two days later. But the momentum which saw the number of Ether (ETH) transactions more than treble across 2020 (from 418,000 to 1.26 million) continued over the past 48 hours, as average transaction costs exceeded $24 once more, according to data from Bitinfocharts.com.
Unite aimed to allow social media users on sites like Twitter and Discord to distribute Ethereum ERC-20 tokens to their audience and community. The project stated it would neglect to build on a layer 2 solution, referring to projects built on Ethereum sidechains which often utilize radically different transaction mechanics and fee pricing mechanisms.
While some have profited from the rising popularity of Ethereum, the need for a blockchain ecosystem that doesn’t collapse under the weight of its own success has not gone unnoticed by developers. Ethereum 2.0, the next major update in Ethereum’s evolution, will seek to scale the blockchain to many orders of magnitude above its current capacity, while a pending improvement proposal aims to restructure how ETH gas prices are calculated.