DeFi user pays $36K for one Uniswap transaction as EIP-1559 draws closer

Ethereum transaction fees are at their highest levels, but even the proposed solution wouldn’t have helped this fat-fingered user.

Ethereum fees are at record levels, but even so, one Uniswap user paid well over the going rate with a gas fee of $36,000 for a single transaction.

Crypto Twitter has been flooded with complaints about the unsustainable fees for using the Ethereum network, but the rates only exacerbated one decentralized finance user’s fat-fingered mistake.

The exorbitant transaction was tweeted by the co-founder and chief technology officer of Groundhog Network, Andrew Redden, who confirmed it was Uniswap-related.

The ludicrous fee turned out to be a typing error, as the user manually entered two prices in gwei together. The fee of 500,801 gwei should have been one (500 gwei) or the other (801 gwei), but not both.

It came out to a whopping 24.94 Ether (ETH), or approximately $36,000 at the time it was made.

Average transaction fees have skyrocketed to an all-time high of around $40, according to BitInfoCharts, after surging more than 1,000% since the beginning of the year. Etherscan’s gas tracker is reporting an average of $23.85 for an ERC-20 transfer and $73.79 for a Uniswap swap at the moment.

An Ethereum improvement proposal called EIP-1559 may help to alleviate some of these fee problems, and developers have hinted that it could be rolled into the Ethereum "London" upgrade scheduled for July 2021.

On Tuesday, Ethereum lead developer Tim Beiko posted an update on EIP-1559 in which he said “Large state testing is 99% done.” A developer call on March 5 will confirm whether the EIP will be included in the London upgrade, he added.

The current system of gas calculations involves a bidding system for transactions where the miners naturally prioritize the highest bids and the lower ones take much longer. EIP-1559 will modify this auction system by dynamically adjusting the fees so users will pay the lowest bid for the block. This enables automated market makers and wallets to accurately calculate fees and provide better estimations. Beiko elaborated:

“Another way of looking at this is that 1559 makes the inclusion price of transactions explicit in the protocol, rather than implicit, as it is right now.”

The proposal will also burn gas fees, which are paid in ETH, and this will have a longer-term impact on Ether issuance and supply. Naturally, the miners have voiced disapproval at this, though network co-founder Vitalik Buterin has commented (in Chinese) that any opposing action they take may simply accelerate the move to proof-of-stake.

Publication date: 
02/24/2021 - 06:39
Author: 
Disclaimer

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.