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Elon Musk targets Dogecoin as high fees for ETH on DEX discourage retail traders

Elon Musk targets Dogecoin as high fees for ETH on DEX discourage retail traders

It was an auspicious moment for the DOGE army on Thursday, when Elon Musk published a tweet endorsing the coin in response to a leading media article about small retail investors being stifled by high DEX fees on Ethereum, according to Zycrypto.

While DEX volumes continued to grow last year, with total volume reaching $8.4 billion at the time of the report, the space is still suffering from the ongoing problem of high transaction fees on the Ehereum blockchain. Because of the congestion and scalability problem, users are forced to pay an average of $100 per transaction, which limits the use of DEX to small traders. “The average trade size on other DEX ranges from $10k –$20k per day, which is a lot compared to centralized exchanges, where the average trade size is usually $2k to $4k. The large transactions are likely due to Ethereum's high transaction fees, which prevents more retail traders from using DEX” – Kayko said Monday. Another telling revelation is that while the average transaction size on DEX has increased over the past few months, the actual number of transactions has remained unchanged, suggesting that participants are mostly whales. While activity on DEX can be judged by daily volume, the chart below shows that the smallest DEX in terms of number of trades has the highest average transaction size of $500,000 to $1 million per transaction, despite the fact that DEX processes less than 50,000 transactions per day. While DOGE transaction fees have risen significantly since last December after the coin's price surge, they remain mostly low – averaging $0.65 per transaction. The Doge development team is also working to further reduce fees by modernizing node operators, following calls from Ilon Musk and users of the resurgent cryptocurrency. In 2014, a fee of 1 DOGE per kilobyte was introduced to prevent fraud on the circuit. Changes are being proposed to reduce the default fee rate to 0.001 DOGE.  

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