The rapid rise in Ethereum gas fees has impacted the amount of ShuttleFlow transaction fees Conflux can sustainably cover related to smaller transaction amounts.
The minimum deposit amount for ShuttleFlow has been increased from .02ETH to .75ETH — note: the withdrawal amount will remain 0.02 cETH
Conflux still covers gas fees related to creating relevant smart contracts and order routing tied to cross-chain transactions
Rising Ethereum gas fees — up 535% from this same time last year — are impacting the entire DApp ecosystem. For average users, Ethereum has become largely unusable for smaller transactions, with the gas fees often exceeding the transfer amounts.
Due to its pre-existing user base, popular coding language and network effects, decentralized finance has found a home on Ethereum, so interacting with Ethereum in the DeFi space is a necessity.
Conflux believes that to further mass adoption, blockchain transactions should be both fast and inexpensive. ShuttleFlow, our multi-chain asset bridge known for its processing speed and almost non-existent fees, is a strong use case for this. As a project we have historically covered all or most of the Ethereum gas fees associated with transactions, in order to facilitate onboarding of new users who typically experiment with lower dollar amounts.
Over the past several weeks, as gas fees have spiked, we have seen an increase in bad actors, exploiting the low fee structure of ShuttleFlow by using it purely as a means of transfer. Multiple airdrops and other small transaction events have targeted ShuttleFlow for this reason, making our business model of covering gas fees unsustainable in the short term.
For every shuttle-in of assets between Conflux and Ethereum, Conflux is covering approximately $40-$50 USD in fees, and for new Ethereum addresses interacting with ShuttleFlow, the cost could be as high as $120 USD. Every shuttle-out is approximately $20 USD. To mitigate these fees and avoid exploitation of our platform, we have implemented minimum deposit amounts, which went into effect a few days ago, following the news that multiple airdrops and DApp launches on our chain were imminent.
- Min 0.02 ETH deposit has been increased to 0.75 ETH note: the withdrawal amount will remain at 0.02 cETH
Even with the new minimums in place, the fees we continue to cover for users places Conflux outside a break even point on fees vs liquidity. Because our ultimate goal is to mitigate exploitation of our platform, we will continue to cover fees with these new minimums in place.
The deposit minimums will be revisited as ETH gas fees return to a more reasonable rate. In the meantime, you can experiment with ShuttleFlow using our newly launched BSC bridge with significantly less fees due to the lack of network congestion.