The exchange will no longer pay withdrawal fees for users. The transfers between Coinbase wallets remain free.
Coinbase Pro, a cryptocurrency exchange focused on professional traders, will no longer pay withdrawal fees for its users. The exchange said it was forced to make such a decision due to the growing congestion of networks, caused by applications from the decentralized finance (DeFi) sphere.
Note that no fees will be charged by the exchange for transfers from one Coinbase wallet to another, or for transactions between verified accounts.
What’s wrong with DeFi
The hype around DeFi has been around for four months already. In mid-June, the volume of funds blocked for the needs of these applications began to grow rapidly: on June 1, just over $ 1 billion was blocked for the needs of DeFi, today this figure exceeds $ 9 billion.
Along with the growth of the DeFi market, grow the fees on the Ethereum network, which is used by the vast majority of decentralized applications. For example, in August 40% of ethereum miners’ income came from transaction fees. For comparison: in May 2020, this figure was at the level of 10%. As of September 17, the commission has reached $ 11.79 per transaction.
In early September, ethereum miners set a record – they earned more than $ 500,000 in one hour from transaction fees alone. Even the founder of Ethereum Vitalik Buterin had to admit the problem, who, however, stated that the community itself was partly to blame for the current situation.
The situation was aggravated by the launch of the Uniswap decentralized exchange control token – UNI, which took only 24 hours to move up to 26 from the 203rd position in the CoinMarketCap ranking. Due to the launch of the token, the number of ethereum transactions pending processing increased from 150,000 to 213,000.
Along with the interest in UNI tokens, another jump in commission was recorded. Ultimately, the miners broke the record set on September 1. According to the Gassnode service, on September 17, ethereum miners were able to earn almost $ 1 million on commissions.