Elon Musk Talks Up Doge Again in Response to High ETH Fees in DeFi

Gas fees on Ethereum make DeFi less accessible to new inventors.

By Radhika Parashar | Updated: 3 December 2021 11:59 IST

Elon Musk Talks Up Doge Again in Response to High ETH Fees in DeFi

Elon Musk has been an avid Dogecoin supporter and calls it the people’s crypto

Highlights

The transaction fee of Dogecoin remains relatively low
Ethereum’s high value has resulted in expensive gas fees
Elon Musk has asked small investors to enter crypto space with Doge

Responding to a tweet about high transaction fees with Ethereum, Elon Musk simply said “Dooooge” — hyping his favourite crypto but also pointing to how it can be used to make Decentralised Finance (DeFi) more accessible to everyone. The Tesla CEO often uses his Twitter handle to drop suggestions for crypto investors at a time the market is witnessing a global boom, and this is another occasion where he has posted about meme-based cryptocurrency Dogecoin. DeFi systems aim to provide an autonomous and decentralised option for financial services that are otherwise regulated by banks. Most of the DeFi applications are based on the Ethereum blockchain, where the transaction fees are now fairly high, because of the cost of each Ether (ETH) token.

Crypto news portal CoinDesk tweeted a story about the DeFi protocol becoming inaccessible to small investors due to Ethereum's high transaction fees. Musk tweeted a one-word reply under this story, “Dooooge”, referring to his favourite cryptocurrency, the Dogecoin

Dooooge
— Elon Musk (@elonmusk) December 2, 2021

The transaction fee, or “gas fee” of the Dogecoin remains largely low, hovering around an average of $0.65 (roughly Rs. 50) per transaction, the CoinDesk report said.

This is one of the reasons why Musk, earlier in October, called Dogecoin “the people's crypto”.

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I mean ????????♂️ the appeal is real #dogecoin ???????? https://t.co/9FCuiv0ROW pic.twitter.com/oueAaU7EKQ
— SlumDOGE Millionaire (@ProTheDoge) October 23, 2021

Musk still believes that the transaction fees for Dogecoin should go even lower, to make the cryptocurrency viable for day-to-day payments like movie ticket purchases.

Robinhood announcing wallets, AMC CEO not only talking about accepting Dogecoin but saying it was the single most interacted with tweet he has ever made, the crypto market finally seeing some green.

I gotta say… pic.twitter.com/3bWIU54keB
— Shibetoshi Nakamoto (@BillyM2k) September 22, 2021

Since each transaction on the Ethereum blockchain requires computational resources to execute, they require a transaction or “gas” fee. Gas prices are denoted in “gwei”, which itself is a denomination of Ethereum - each gwei is equal to 0.000000001 Ether.

As per a blog on Ethereum's official page, gas fees help keep the network secure from bad actors who could spam the network.

The gas fee on Ethereum transaction has remained high for a while, owing to the blockchain network's popularity which has become a matter of concern for many people.

In November, beer company Budweiser launched a collection of non-fungible tokens (NFTs), built on Ethereum. For people wanting to purchase of these digital collectibles from the beer brand, a gas fee of $75 (roughly Rs. 5,600) is required to complete the buyout. The high transaction fee on this sale garnered major criticism online.

I love how Budweiser chose to drop an NFT on a blockchain that their average consumer can't afford the gas fees on. https://t.co/BKA3BsS3dT
— sp00n1cus.sol (@sp00n1cus) November 29, 2021

At the end of August, Ethereum network gas costs skyrocketed and tapped a high of $59 per transaction on September 7, according to the average transaction fee spent on that day. The median fee for an ether transaction on September 7 was around $20 perhttps://t.co/rIIm9UsMZP pic.twitter.com/NN1cTLER1g
— TokenAndCrypto.com (@tokenandcrypto) September 13, 2021

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Further reading: Elon Musk, Dogecoin, DeFi, Decentralised Finance, Ethereum, Gas Fees

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More