Ethereum is at the center of a daunting dilemma. On the one hand, its decentralized applications are popular, on the other hand, transaction fees make them difficult to use without wincing. Fortunately, some players like Balancer want to find a solution to this structural problem.
So, after experiencing a first sad record of fees in September 2020 with an average cost of $ 14 per transaction, Ethereum broke a new record on January 11 with more than $ 16 in average fees and there is no what to rejoice.
As is the case with Bitcoin, as well as many Proof of Work blockchains, Ethereum often faces these criticisms. In fact, the Ethereum network can process around 30 transactions per second. Obviously, the activity on Ethereum is much higher, which causes a delay in the processing of transactions and, as a result, congests the network.
At a time when some projects choose to begin a migration to second-layer protocols to reduce costs, Balancer is taking an entirely different direction, namely to reimburse the costs of its users.
So, following a governance vote, the Balancer community decided to allocate 30,000 BAL, or $ 638,400 at the current rate, in a transaction fee reimbursement program.
The goal is very simple, Balancer wants to encourage users to continue using the platform despite the exorbitant fees. This type of program is not innovative. Indeed, the Silver wallet also reimbursed transaction costs when it started.
In practice, users will have the option of being reimbursed for 45% to 90% of the costs spent.
When launched, the program will only affect trading between WETH, WBTC, USDC, DAI, and BAL tokens. Also, this will not be applicable when using aggregators such as 1inch or Paraswap.