Why Are Crypto Fees Going Up?

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LayerOneX
@LayerOneXJul 2, 2025

The Spaces focused on the topic of increasing crypto fees. Hosted by Cody, it featured experts discussing whether the hike in fees is due to market trends or individual project decisions. Joel from Dash, Ryan from Open Loop, and others shared insights into the evolution of fees within crypto networks. They examined the transition from low to high fees, implications on transactions, and solutions such as layer two scaling, and exchange strategies. The discussion also touched on the future of crypto as money and market dynamics. Marcelo and Maverick shared insights from their projects, Soulbound and Maverick, respectively.

Overview of Twitter Spaces Conversation on Crypto Fees

Introduction

The session was hosted by Cody in the "X Talks" series, focusing on why crypto fees are rising and discussing whether this is a wider trend in the industry. Cody assembled a panel of experts including Marcelo from Solbound, Joel from Dash, Ryan from Openloop, Pyke from Pyke Dao, and Maverick from Mavericks.

Main Discussion Points

  1. Initial Observations on Crypto Fees

    • Cody: Observed that buying and swapping tokens seem to have increased in fees, raising questions about whether this is a market trend or platforms being opportunistic.
    • Joel: Historically, transactions had zero fees during Bitcoin's early adoption era, but as networks grow, fees are necessary to sustain them. Crypto is likely to become more expensive due to reduced inflation subsidies, necessitating actual fees to cover network operations.
    • Marcelo: From Solbound’s perspective, platforms should minimize fees, emphasizing decentralized operations where creators receive greater benefits.

  2. Factors Driving Fee Increases

    • Pyke: Highlights an increase in monthly active user wallets and notes scalability issues. He suggested that Ethereum is cheaper now due to EVM-compatible competitors. However, as more transactions move to these alternatives, they drive costs up.
    • Maverick: Emphasizes that Ethereum did not scale adequately and relied on Layer 2 solutions for scalability. He asserts that as adoption grows, the market will push fees towards near-zero.

  3. Ways to Mitigate High Fees

    • Joel: Advocates for market research on swaps and lending protocols. He mentions the possibility of inefficiencies in smart contracts that could lead to higher costs and suggests exploring alternatives that offer efficient and cost-effective transactions.
    • Pyke: Suggests strategies such as using cross-chain swaps like L1X and planning transactions during low-demand times to save on gas fees, specifically highlighting timing as a benefit.

  4. Economic Value of Crypto as Money

    • Joel, Pyke, and Maverick: Engaged in a debate on whether crypto can be considered money. Joel posits that money is a technology for trade, evolving with time and ecosystem changes. Cryptocurrencies can become currencies through broader acceptance and technological advancements.
    • Maverick: Clarifies that transaction fees do not equal revenue for blockchain projects, emphasizing that fees are burnt or dedicated to validators rather than recognized as profit.

Key Highlights

  • Fees: There’s consensus that fees are increasing as a consequence of scaling and market demands. Discussions around temporary spikes due to network capacity show a complex landscape where blockchain needs efficiency in design.
  • Adoption and Evolution: Participants agreed that as blockchain technology and usage evolve, fees could become minimal, changing the landscape of transaction economics.
  • Role of L2: Layer 2 solutions, while effective in scaling, present a risk of hidden fees and inefficiencies if not utilized properly.
  • Research as Strategy: Investors are encouraged to conduct thorough research to mitigate the impact of fees on transactions.

Closing Remarks

The panel concluded that while high fees are currently a reality due to adoption and scalability issues, future advancements and strategic use of technology could alleviate some of these pressures. As crypto continues to evolve and integrate, its potential role as a recognized form of currency will expand, and understanding its implications on fees will be crucial.

The discussion ended with invites for further debates on cryptocurrency, focusing specifically on transaction fees versus revenue. Cody also announced upcoming sessions aimed at connecting crypto projects with community members.