Whales now taking advantage of high Ethereum gas fees

Making transactions on the Ethereum blockchain network is considered to be an expensive task because of extremely high gas fees.

Traders and investors who have used Ethereum even at least once last month would have noticed that transactions that cost few dollars ago can now have a significantly higher price.

But while users lament about transaction fees, whales (high volume traders) have found ways to turn the current market fee to their advantage, successfully monopolizing Ethereum’s significant use cases right now – yield farming and decentralized exchanges.

Yield farming now whales game

Participating in yield farming on the Ethereum network would mean having to contend with expensive transaction fees that come with depositing and withdrawing investment.

At peak times, these fees can easily reach $100 per transaction since almost all yield farms are smart contract-based and involve a transfer of ERC-20 tokens.

Basically, for a 10% APY, a minimum of $2,000 investment for one year is required just to offset transaction fees. But larger investments make such costs negligible, making yield farms more attractive for experienced and big-time investors.

Whales take over Decentralized Exchanges (DEXs)

For the past years, decentralized exchanges such as Uniswap and Curve are considered to be one of the pinnacle achievements in the blockchain industry for providing flexibility and freedom to traders.

This might have been the case a few months ago but currently, due to, again, expensive transaction fees associated with Ethereum-based DEX platforms like Uniswap, decentralized exchanges are quickly becoming a hotbed for whales.

Case in point, last week, the average transaction fees on the top four most popular DEXs reached $100. This meant having the need to spend around the same amount just to make a cryptocurrency purchase on a decentralized exchange.

When taking issues on fees into consideration, larger orders stand a better chance of profitability.

 

Image courtesy of Cointelegraph News/YouTube

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