Impact of high gas fees: Ensuring long-term sustainability
If you’ve used Ethereum in the last few months, you have surely noticed the rise in gas fees. On the one hand, it’s amazing to see the increased activity, because it implicates the Ethereum community’s success in building projects that people want to use. On the other hand, it means interacting with the network is highly cost-inefficient.
We’re publishing this post to explain how this affects Pillar and update you on how we’re planning to mitigate the impact of gas prices on app usage in the future.
Since the launch of our Smart Wallet in May this year, we have subsidized the creation of almost 10k Pillar smart wallets - for which we paid 184.1 ETH ($62.467 at current valuations) in total costs. We’ve gladly done so in order to grow our user base and minimize friction in the on-boarding process.
However, as you can imagine, the rising gas fees have a big impact on the costs of deploying a smart wallet. In May, the average cost for deploying a smart wallet was $4.15. As of today, Pillar pays $35.45 on average for the creation of just one smart wallet. That’s more than a sevenfold increase in costs.
While it is, and remains, our aim to provide the smoothest on-boarding experience in crypto as possible, as a business, we also have to ensure our long-term sustainability.
That’s why we’ve decided to temporarily stop subsidizing the deployment of Pillar Smart Wallets. Lowering our costs means we can put those “saved” funds to better use - to enhance the app and grow the Pillar ecosystem.
We’d like to reiterate our commitment to give users a secure and easy way to interact with Web3 services. As such, we’re continuously exploring ways to expand the Pillar Payment Network, our Layer 2 solution, and to minimize the impact of gas fees on our users’ transactions. We’re confident in the Ethereum community’s ability to innovate and solve problems, and envision a future in which transfers are cheap (again).
That being said, the discontinuation of subsidies for the creation of Smart Wallets is temporary. We’d be happy to resume this once network congestion is lower, and will keep you updated on any and all changes.
As always, we’re available to discuss everything Pillar-related in our Discord.