NFT Craze Re-ignites Driving Gas Fees through the Roof

Takeaway Points

  • Prices of NFTs have gone through the roof for the past seven days.
  • Gas burn fees have increased since EIPS implementation.
  • There is a renewed interest in the purchase of NFTs after it dwindled for a while.

The NFT Mania

Non-fungible tokens (NFTs) are unique digital assets stored on the blockchain that represent a collectible. These digital items can be MP3s, JPEG Images, PNG animations, texts, and even tweets. For every transaction (both sale and resale), the blockchain generates a unique hash signature that validates the authenticity of the art. This ensures no item can ever be duplicated, and sometimes serves as provenance.

NFTs have in a very short period changed how we perceive, experience, purchase, or collect art. Bringing creatives, collectors, and celebrities alike to join in the boom. In the past six months, some of the most expensive NFTs have been sold. Big brands like Visa, Coca-Cola, and Asics have all waded into the space.

But this frenzy does not come without risks. While many have recorded an unprecedented success in trading NFTs, others have only incurred losses. Sometimes, this is a result of the volatile nature of the crypto market, as well as high gas fees which sometimes is an unlikely deterrent to new users.

The Notable Big Sales that Inspired the Boom

The biggest boom came in March when Beeple’s Opus: EVERYDAYS: THE FIRST 5000 DAYS sold online for $69,346,250 according to Christies. CryptoPunk #7523 one of the rare alien pieces on mask sold for $11.8 Million on Sotheby’s Natively Digital in June. Making it the second most expensive NFT sale after Beeple. Many other CryptoPunks dominated the big sales of the last six months. The source code of the web, as invented by Berners-Lee, with the title: “This Changes Everything“, also went to auction and garnered a huge sum of $5.4 million in June. Although FEWOCiOUS, took the world by storm as the youngest artist featured by Christies selling his “The EverLasting Beautiful” for $550,000 on Niftygateway. It proved how the market changed over time.

Although more and more people are joining the frenzy because of the mouth-watering amount these items are worth during and after the sale, the high gas fees phenomena still stare everyone in the face.

The Gas Fee High Ceiling

A gas fee is a fuel for transactions that happen in most blockchains. It is usually a reward gifted to miners of that particular transaction. This is very common with the Ethereum Blockchain where most of the top NFT marketplaces were launched. Currently, Opensea which is the biggest NFT marketplace consumes more gas for a transaction to happen. Before the EIPS most transitions can go as high as 200 gwei for just a gas fee.

Ethereum Average Gas Price is at a current level of 106.50, up from 93.63 yesterday and down from 176.91 one year ago. This is a change of 13.75% from yesterday and -39.80% from one year ago.”

Reports Ychart.

What has changed about NFT gas fees since the implementation of EIPS in August?

As of press time, (Wed, Sep 22) gas fees high is equal to 41 gwei while its low is 40 gwei according to Ethereum gas tracker. To put this in perspective, 10 gwei is equal to 1 eth.

Also, the data from the last “7-day historical gas price” revealed that at the beginning of September transaction gases were also higher than their previous highs a week before (in August). Gas prices plummeted from Sep 3, continued an average high until Sep 5 which was its lowest. Gas prices picked up the pace on Sep. 6 with an average high of 116 gwei and a highest high of 774 gwei. It rose again to an average high of 188 gwei and skyrocketed to a highest high of 10038 gwei.

Although the gas fees fluctuate, Opensea as at press time gulped at about $536,010.70 (155.03 Eth) in gas fees, ranking Number 4 in the Gas Guzzlers List.

It is quite obvious that much has not changed since the Implementation of the EIPS in August. Although the full Ethereum 2.0 model is yet to be fully functional, NFTs will keep driving up gas prices until the market slows down.

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