As Ethereum network congestion reaches a high, Coinbase Pro has announced that it will no longer pay network fees for users.
Network Congestion Caused by DeFi
The Ethereum network slowdown was catalyzed by the DeFi craze that has spread throughout crypto the past few months. This culminated with the announcement of the Uniswap Protocol Token (UNI) airdrop. Over 70,000 people claimed their tokens within 3 hours of the announcement, with gas prices reaching 700 gwei.
Gas Wars and Backlogs of Transactions
Many users have reported stuck or canceled transactions. Miners prioritize users who are willing to pay higher gas rates, which creates gas wars on the Ethereum network. In turn, this creates a backlog of transactions on the network.
Due to these high prices, Coinbase Pro announced to its users that users will now have to pay their own Ethereum network fees. It acknowledged that Coinbase Pro traditionally covered network fees for users, but due to the current Ethereum network congestion, Coinbase will no longer due so.