Benzinga – By Sunil Srivatsa, founder and CEO of Storm Labs
DeFi offers exciting possibilities, but, beyond the upfront gas fees, there are hidden costs that can significantly eat into your potential returns.
Unlike traditional payment processors like Visa (NYSE: V) and Mastercard (NYSE: MA) with fixed fees, smart contract blockchains operate differently. On platforms like Ethereum (CRYPTO: ETH), Solana (CRYPTO: SOL), and EVM-compatible chains, gas fees are dynamic. This means the cost to process your transaction fluctuates based on network congestion and the priority you set for completion. Currently, the average gas fee, which is the cost of facilitating a transaction on a smart contract, costs around $4.70 per ETH’s price.
Beyond the gas fees, DeFi lurks with hidden costs that can significantly impact investor returns. Impermanent Loss (IL) occurs when deposited asset prices…
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