Liquid Crypto Exchange Halts ERC-20 and ETH Withdrawals Due to Rising Gas Fees
Liquid Global has temporarily suspended the withdrawals of ERC-20 tokens and Ether due to rising GAS fees. The Japan-based crypto exchange notified its users of the development via a tweet today. It further explained that the exchange planned to resume withdrawal services once GAS fees returned to normal.
Rising Gas Fees Costs a Major Concern
Ethereum gas fee costs constitute a significant concern for many stakeholders within the ethereum ecosystem. Ethereum has been plagued with rising gas fees on its network in recent years as the largest smart contract network. This has not been helped with the development of DeFi, resulting in more users on the network.
More than 90% of DeFi protocols are on the Ethereum network, and DeFi users have complained of crazy gas fees. At the time of writing, the average cost of swaps on Uniswap and Sushiswap ranges from $40 to $75. This problem also extends to other regular Ethereum transactions with gas fees currently at an average of $16 per transaction.
Due to these costs, there has been a clamor for crypto enthusiasts to switch to other cheaper networks. For example, Ethereum rival Tron has experienced more users that prefer to send stablecoin USDT over its network in recent months. Within a year of the launch, over $10 billion USDT has been transferred using the Tron network. Nevertheless, Ethereum continues to dominate due to its popularity and first-mover advantage. But this could change if gas fees continue to increase, as evident with the suspension of withdrawals by Liquid exchange.
Ethereum 2.0 has been cited by many within the ethereum community as the solution to the rising gas fees. The new version of Ethereum will switch the smart contract network from the current proof-of-work consensus to the energy effective proof-of-stake protocol.
The beacon phase was launched in December and kicked off the transition to the new consensus protocol. Ethereum developers will not fully deploy Ethereum 2.0 until the first quarter of 2022. This means that the gas fees problems will persist until then, and there are fears that it could cripple the network. Until then, Ethereum developers will have to deploy temporary solutions to reduce gas fees on the Ethereum network.