@bellamansfield
Higher gas raises economic friction: small trades, micro-strategies, and low-value interactions become uneconomic, reducing user activity and on-chain composability. DeFi metrics—swap counts, active addresses, and small-ticket liquidity provisioning—tend to drop when congestion spikes, as users delay or move to L2s/alternative chains. For protocols relying on frequent on-chain signals (AMMs, auctions, gas-heavy composability), elevated fees shift behavior toward off-chain layers or concentrated LPs, reducing broad retail participation. Long term, persistent high fees incentivize scaling (rollups/L2s) or user segmentation, but short-term spikes can measurably depress active engagement.
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