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What can you do about those gas fees? Jan. 20–27

This is a repost of Finance Redefined’s latest installment, where Cryptox unpacks the latest developments in DeFi. The newsletter is delivered to subscribers every Wednesday.

DeFi was reasonably quiet in terms of major fundamental developments, instead letting prices do the talking. Many tokens rallied, both the popular and the almost forgotten. Save for a few hiccups due to Bitcoin’s shaky price action, we are still well into DeFi season.

This price action, unfortunately, means that using DeFi is pretty much impossible. Ethereum gas fees steadily hovered above 100 Gwei, which to any veteran will seem like an impossibly large number. While we’re not quite at the 300 Gwei seen in the summer of DeFi, it’s worth remembering that Ether is also worth about 3-4 times as much.

For a fun exercise, try inputting your wallet address in fees.wtf and marvel at just how much money you threw to miners.

Average gas prices in 2021, source: Etherscan.

The good old days when you could confidently send a transaction for 2 Gwei seem so far away now. Until we get back to that point, fees will remain a serious deal-breaker for mere mortals who can’t transact with tens of thousands of dollars at a time.

With DeFi, you also can’t really afford to be stingy. A transaction sent to Uniswap or another decentralized exchange has to be confirmed pretty quickly, or it’s likely to fail due to slippage protection or other limits. A failed transaction stings twice: Not only does it not do what you want, it also consumes the gas fee anyway.

Unfortunately, there isn’t much that you can really do about this. I did, however, write a piece this week on how to find the right time to send a transaction.

Picking the right time is probably the most accessible trick. Fixing the problem entirely, on the other hand, requires ditching Ethereum and its liquidity. I suggest you still explore the various non-Ethereum options available, including layer-two chains and external blockchains. Chances are you’ll find what you need, assuming you’re not a sophisticated ape tracking Andre Cronje’s wallet for his latest unreleased project.