Blockchain Gaming

Blockchain Games Victim of Ethereum Gas Prices

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Blockchain games are one of the biggest victims of the current high gas prices on the Ethereum blockchain. Because of these high gas prices it’s impossible to play certain games, without paying exorbitant amounts of money. According to a report by DappRadar the amount of transactions for blockchain gaming has dropped with 87 percent.

The increased gas prices for the Ethereum blockchain are the result of increased activity. The quicker you want a transaction to be saved on the blockchain, the more you need to pay. Paying a 5 dollar fee on an one million dollar transaction is no big problem, but the same fee certainly is a problem if you want to buy something small.

As a result of this, activity for blockchain games drops when the Ethereum gas prices are high. DappRadar showed a directly correlation between the gas price and the daily gaming activity. They also showed that the drop in active Ethereum users actually benefits other blockchains. The number of non-Ethereum gaming app users increased by 14 percent.

What is causing this?

There are currently over 96 thousand transactions waiting to be processed by the Ethereum blockchain. Among them are transactions that have been waiting for 27 days before they are processed. Last week there were ‘only’ 82 thousand pending transactions.

The main cause is increased traffic. Therefore we could take a look at the wallets to use the most gas on the network. The top address using 8 percent of all gas fees in the past 24 hours, is apparently moving 10 thousand Paxos Dollar (PAX) around between addresses. The wallet in second place is creating smart contracts, while the third one is part of Nest Protocol.

Obviously we could be pointing fingers. However, it makes a lot more sense to look at potential solutions. For example never allowing a transaction to take longer than seven days, forcing miners to take the low fee. Ethereum 2.0 could be another solution. Nonetheless, blockchain games suffer under the high gas prices from trading and decentralized finance initiatives on Ethereum.

Second-layer solutions

It still takes another six months at least before Ethereum 2.0 is here, and it’s even a question whether that will solve things. A more direct approach to solve the problem would be a second-layer solution. In the past few days both Matic and OmiseGo launched their second-layer network. These type of networks can register lots of transactions, bundle them and then send them to the Ethereum blockchain. Instead of processing one hundred separate transactions, Ethereum then only needs to take care of that one bundled transaction.

The Ethereum blockchain is by far the most popular blockchain for gaming. Many game developers use the blockchain to give players ownership over for example in-game land and resources. However, blockchain technology isn’t fast enough to process millions of actions within seconds. In addition, Ethereum isn’t ready to process thousands of transactions per second, or even minute. In that case, gas fee go up. Second-layer technology combines transactions, and as a result gas fees would drop tremendously.

In recent months a variety of gaming projects announced that they would move their technology onto the Matic Network. Ethernal and 0xUniverse are just a few of the gaming projects that embraces the speedy second-layer technology.

Robert Hoogendoorn avatar
Robert Hoogendoorn is a gamer and blockchain enthusiast. He got in touch with crypto in 2014, but the fire really lit in 2017. Professionally he's a content optimization expert and worked for press agencies and video production companies, always with a focus on the video games & tech industry. He's a content manager and creator at heart, started the Play to Earn Online Magazine in early 2020.