Crypto glossary
Network congestion
Network congestion happens when demand for a blockchain's blockspace exceeds its capacity, so fees spike, transactions wait and some apps slow down or fail.
Each block can only hold so many transactions. When more people try to transact than fit, pending transactions pile up in mempools and users raise their fees to get ahead. Congestion shows up as rising fee estimates, growing mempool size and longer confirmation times on explorers.
Typical triggers include sharp market moves that send traders rushing to exchanges, popular token or NFT launches, airdrop claims and waves of inscriptions on Bitcoin. In December 2017 a craze for the CryptoKitties game slowed Ethereum, and on some high-throughput chains spam from trading bots has caused outages rather than just higher fees. DeFi users can be hit hardest, because liquidations and arbitrage happen exactly when the network is busiest.
Congestion is temporary but costly. Small payments become uneconomic, stuck transactions need fee bumping, and users may overpay out of panic. Layer 2 networks, better fee markets and local fee markets that price only the busy parts of a chain are the main responses, though they can still be congested themselves.
Example
During a market crash, the Ethereum base fee jumps tenfold within an hour and a user's DEX trade sent with a low fee stays pending until prices have already moved.