How to Pay ZERO Transaction Fees on Coinbase (2020)
- Rising gas prices prompted Coinbase to change its policy
- Community not happy with Coinbase solution
Coinbase Pro no longer pays Ethereum transaction fees
Coinbase will no longer pay commissions for its users
The exchange refers to the rise in the cost of gas in the Ethereum network
Growth in gas prices due to surge in activity in the DeFi industry and low network scalability
Cryptocurrency exchange Coinbase Pro announced that it will no longer pay gas to its customers for transactions on the Ethereum network.
The company made a decision amid steady growth in fees.
Previously, the exchange paid the cost of gas for its customers. Policy change effective Thursday 17 September.
Rising gas prices prompted Coinbase to change its policy
The exchange announced it on its official Twitter page. In the comments, the company explained that recently there has been a sharp increase in activity on the Ethereum blockchain, so it is forced to shift the obligation to pay commissions directly to users..
Starting today, Coinbase Pro will pass along network fees directly to our customers.
These fees (sometimes referred to as “gas fees” on the Eth blockchain) are paid directly to crypto miners that process transactions and secure the respective network. https://t.co/hcuPoejwCz
– Coinbase Pro (@CoinbasePro) September 17, 2020
Coinbase also reminded customers that transfers between wallets within the exchange remain free. In addition, users do not need to pay to hold funds on the exchange..
On the one hand, by entrusting Coinbase with the storage of assets, users do not pay commissions for gas, but on the other hand, they expose themselves to the risks associated with centralized storage..
The explosive growth of interest in decentralized finance (DeFi) has led to a sharp increase in activity on the Ethereum network. The more transactions compete for space in the block, the higher the cost of gas. According to Ethgasstation.info, the largest consumer of gas on the network at the moment is the Uniswap decentralized exchange. In the last 30 days alone, site users paid commissions in the amount of $ 12.7 million.
The popularity of Uniswap is likely not only luring customers away from centralized exchanges like Coinbase Pro, but also driving gas prices up. Considering that Coinbase Pro previously paid these costs for its users, this increase in price most likely affected the company’s profitability..
For example, on September 17, gas prices ranged from $ 3.93 to $ 11.27, making small transactions unprofitable.
Community not happy with Coinbase solution
The crypto industry was quick to condemn Coinbase for the policy change. In the comments, people wrote that the exchange would lose customers in this way..
Some have also pointed out how quickly Coinbase is raising other fees. One of the commenters suggested that, given the trading fees on the platform, the exchange should pay all transaction costs itself..
Do you guys want customers? Cause this is a bad way to attract new ones.
– BullChain (@BullChain) September 17, 2020
However, there were those who lashed out with criticism at Ethereum, which cannot solve its scaling problems in any way. The block size limitation leads to higher prices and delays in transaction processing. Scaling issues are still a hot topic of discussion in the crypto community, which is still waiting for the release of Ethereum 2.0.. Previously edited by BeInCrypto reported that the rise in gas prices slows down the development of the DeFi industry.
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