Ethereum is notorious for its extremely high fees when the network activity amps up.
In January, with ETH and DeFi tokens enjoying an uptrend and offering buy the dip opportunities, too much activity is making the platform costly to use. Popular DEX Uniswap, which has long been the biggest gas guzzler, has spent $28.3 million in gas in the last 30 days.
“The high gas costs are a direct result of *huge demand for trading on Uniswap,” said Hayden Adams, the creator of Uniswap, earlier this month when the fees skyrocketed yet again.
“Scaling is a huge problem. It absolutely sucks small transactions are sometimes priced out during volatility.”
But it looks like it’s not only the smaller users that are feeling the brunt of the hefty fees; even the billionaires are complaining. This billionaire, is none other than crypto skeptic Mark Cuban.
Cuban mentioned that gas was always an issue when Haralabos Voulgaris, Head of Quantitative Research at Dallas Mavericks, suggested there being real value in sending money over a decentralized, permissionless network. Cuban feels,
“Except the gas is always an issue. Just the cost of moving crypto to AAVE is crazy expensive, and the number of non crypto options will increase.”
Unironically “crazy expensive” is the common denominator between most world-shattering technologies in their infancy. https://t.co/ll9J8ZruSv
— Qiao Wang (@QwQiao) January 12, 2021
With the Shark Tank investor who finds more worth in bananas and compares crypto trading with the dotcom bubble, name dropping popular DeFi project, AAVE got the CT excited
AAVE 10.16%
Aave / USD
AAVEUSD
$ 140.89
$14.31
10.16%
Volume 501.5 m
Change $14.31
Open $140.89
Circulating 12.21 m
Market Cap 1.72 b
9 h
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“One of the most high-profile billionaires trying out DeFi. I am liking this trend,” noted one such DeFi investor.
However, just because Cuban publicly doesn’t find worth in crypto doesn’t mean he isn’t trying things out, as he responded,
“I don’t think people realize I try to test and use all this stuff and have for years. I still have crypto from the early days of coinbase. I’ve never sold anything.”
Feedback taken @mcuban! See you on Layer 2
— Aave (@AaveAave) January 12, 2021
As for decentralized finance itself, Cuban says, “DeFi has incredible potential.” Still, according to him, much like derivatives, “risk never leaves the system” as it faces the risk of a dominoes-like collapse. Cuban said on the prospect of Defi fixing the problem of underbanked,
“It’s a long way off for the unbanked. Most deal with cash or lack compute power so they need intermediaries. That’s costly. As DeFi grows away from overcollaterization, it will be interesting to see if access expands or contracts.”
But here, the CT takes over and points out that while “the system is only as strong as its weakest link.” We do, in fact, need better insurance models; the missing point is “unlike tradFi, DeFi is a perfectly transparent system that allows you to measure risk in real time,” said Santiago R Santos, a partner at Parafi Capital.
The DeFi space has grown to over $20 billion in total value locked (TVL) as the DeFi project continues to grow and rise in value. This week, the top US banking regulator actually talked about the opportunities of DeFi and regulators needing to be ready for it.
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