U.S based cryptocurrency exchange Coinbase Pro announced in a tweet today that the exchange would begin passing network fees to its customers with network fees (otherwise known as Gas on the Ethereum blockchain) which is paid directly to cryptocurrency miners that process transactions and secure the blockchain networks.
To ensure a smooth experience for our customers and reasonable transaction processing times, Coinbase Pro will charge a fee based on our estimate of the network transaction fees that we anticipate paying for each transaction.
— Coinbase Pro (@CoinbasePro) September 17, 2020
The exchange stated in a tweet that historically, Coinbase Pro had absorbed these fees on behalf of its customers but now it cited that wider crypto adoption due to applications like DeFi, payments and other projects had made the Ethereum network busier and incidents of congestion were more frequent.
Moreover, on-chain intelligence platform Glassnode revealed that the launch of the UniSwap (UNI) token had caused major congestion on the Ethereum network which caused a surge in ETH miner fees with miners receiving $1 million in a single hour.
Almost $1M USD in fees were spent in a single hour!
This is a new record high (anomalous tx fees earlier this year excluded).
Live chart: /6y2YIUAGJr pic.twitter.com/iBGcayQQkO
— glassnode (@glassnode) September 17, 2020
The move, according to Coinbase Pro, was an attempt to be transparent about their fees. Coinbase Pro will charge fee based on their estimate of the network transaction fees that they anticipate paying for each transaction.
In their tweet, it was also stated that
In certain circumstances, the fee that Coinbase Pro pays may differ from that estimate. All fees we charge will be disclosed at the time of your transaction.