This isn't the first time we've experienced a surge in "gas" prices on the ethereum blockchain and probably not the last until ETH 2.0 arrives. Most of the top DeFi platforms and decentralized exchanges (DEX) are built on ETH. This results in an increase in transactions that lead to congestion in the network. When congestion increases so do the gas fees that must be paid.
ERC-20 Transfer
Currently, the cost of a simple ERC-20 token transfer is averaging $21. That means that it cost over $20 just to simply send a token between two wallets. Now, if you are trying to transfer a token from an exchange the fees may be even higher.
Uniswap Swap
Let's say you have token X and want to trade it for token Y on Uniswap. Well, that right now is gonna cost you around $66. The fee would be even higher if you needed the transaction confirmed quickly.
Unless you are trading a large value of coins, this is practically useless. If I had $200 USDC that I wanted to trade to SNX, I would loose over 30% just making a trade. For the average retail investor, using DEX is not an option right now.
Adding/Removing Liquidity on Uniswap
For those traders trying to capitalize on Uniswap LP, the cost to add or remove liquidity is averaging around $58. Again, unless you are providing a lot of liquidity, this may not be an option. If you have already provided liquidity, my recommendation is to just leave it alone. Trying to withdraw it would take a chunk out of your profits.
Looking at the 7-Day Historical Gas Prices it's clear that these gas prices have been consistently high. It makes it frustrating for the average investor, to either forget ERC-20 tokens for now or just pay the ridiculous fees.
Recommendations
If you want to trade ERC-20 tokens, do it on a centralized exchange. Here you are not charged ETH fees with each transaction. Instead, you would only be charged when trying to withdraw from the exchange. In normal times, I prefer to keep my coins off of exchanges but right now that is costing too much money.
I'm excited for ETH 2.0 to arrive, but know that it will take some time. I'm bullish on the future of ETH but these gas fees cause me some concern.