You should think twice before launching new coin on the Ethereum blockchain.
1. High Transaction Fees Are a Major Bottleneck
One of the most significant drawbacks of using Ethereum for new projects is the consistently high transaction fees, or "gas fees." These fees are paid to miners for validating transactions on the blockchain. While this system ensures network security, the costs have become exorbitant, especially during times of network congestion.
For developers, this creates a massive hurdle:
User Friction: When fees for basic token transfers or smart contract interactions cost $20, $50, or even $100 during peak periods, end users are discouraged from engaging with dApps or transacting with new coins.
Deters Small-Scale Projects: High gas fees disproportionately impact smaller projects and startups, which may not have the capital to absorb these costs or the user base willing to pay them.
Limits Scalability: Projects designed to handle high volumes of microtransactions, such as gaming or micropayment systems, become practically unfeasible due to prohibitive fees.
Even with Ethereum's transition to Proof-of-Stake (PoS) through Ethereum 2.0, gas fees remain an issue, as the fundamental cost mechanics have not changed.
2. Network Congestion Hinders Performance
Ethereum's popularity comes at a price: network congestion. When the network becomes crowded, gas fees spike further. This lack of scalability can be detrimental to new projects relying on consistent and fast transaction processing.
For instance, during high-profile NFT drops or token launches, the Ethereum network often becomes clogged, leading to failed transactions or exorbitant costs. Developers launching new coins risk alienating their user base if their project's usability suffers due to these congestion issues.
3. Intense Competition and Lack of Differentiation
Ethereum is already saturated with thousands of tokens, many of which are redundant or offer little innovation. Launching a new coin on Ethereum often means competing with established projects that dominate user attention and liquidity.
Additionally, newer blockchains like Binance Smart Chain, Solana, and Avalanche offer lower fees, faster transaction speeds, and growing ecosystems, providing developers with alternative platforms to stand out and attract users.
4. Erosion of Developer and User Trust
The unpredictable and often excessive gas fees can erode trust in projects built on Ethereum. Users may perceive such projects as less accessible, while developers struggle to maintain consistent user engagement. Over time, this damages the reputation of the coin and undermines its potential for success.
Conclusion
While Ethereum has historically been the go-to platform for creating new coins, its high transaction fees and scalability challenges make it increasingly unattractive for developers in 2025 and beyond. With more efficient and cost-effective blockchain platforms available, developers should consider alternatives to maximize their project's success and user adoption.
By choosing a platform with lower fees, faster speeds, and modern technology, developers can focus on innovation and user satisfaction without being burdened by Ethereum’s well-documented shortcomings. Ethereum remains a powerful blockchain, but for many, the costs simply outweigh the benefits.
