The transaction fees of the Cardano network reached a new high of $15.2K on May 29, 2023, the highest level since Aug. 11, 2022. This shows that the network activity and demand have increased significantly. However, compared to Bitcoin and Ethereum, the two leading cryptocurrencies by market cap, Cardano still has the lowest transaction fees.
Cardano’s Low Fees Remain Its Strongest Feature
Bitcoin recorded a transaction fee of $1.76 million in the last 24 hours, while Ethereum had a transaction fee of $9.16 million. Cardano’s transaction fee is between 70 times lower than Ethereum’s and 0.86% of Bitcoin’s. These numbers indicate that Cardano has an edge in terms of lower transaction costs, despite its recent spike in fees.
The primary reason for the significant difference in transaction fees is due to the underlying technology of these platforms. Cardano was designed to handle a larger volume of transactions per second (TPS), which further reduces the cost per transaction. Cardano uses a proof-of-stake (PoS) consensus mechanism called Ouroboros, which allows validators to stake their coins and earn rewards for securing the network.
Ouroboros also enables parallel processing of transactions through multiple chains called epochs and slots, which increases scalability and throughput.
Cardano recently experienced a significant 91% increase in its decentralized exchange (DEX) volume over the past week, rising to $68.5 million. The surge is attributed primarily to increased activity on Cardano-based DEX platforms, especially Minswap, which accounted for 90.4% of the total DEX volume.
The Cardano Network Continues to Expand
The rise in transaction fees on Cardano reflects the growing adoption and innovation of the platform. Cardano has been undergoing a series of upgrades that aim to enhance its functionality and interoperability. Since then, Cardano has witnessed an influx of developers and projects that leverage its low-cost and high-performance platform.
Some of the notable examples are SundaeSwap, a DEX that uses an automated market maker (AMM) model; World Mobile Token, a project that aims to provide affordable and accessible internet connectivity in Africa; and SingularityNET, a decentralized artificial intelligence (AI) network that migrated from Ethereum to Cardano.
Cardano’s transaction fees are expected to remain low in comparison to other platforms as it continues to optimize its protocol and introduce new features. With these developments, Cardano aims to become a global, social, and financial operating system that can support millions of users and applications.
