Ciabarra details what thinks is the issue in a post on Medium.
I’ve narrowed down the issue to the use of Apple’s Wireless Direct Link (AWDL) that is used for AirDrop, AirPlay, and Gaming connections. I’ll go out on a limb and say the WiFi issues are because of Apple’s choice of using Bonjour over AWDL and that, given the constraints of the WiFi hardware, this will be difficult to get right. But perhaps I’m crazy, and this is just a bug that can be fixed by Apple.
The problem can be easily replicated by performing a speed test and then while its running opening Control Center. This will cause the discoveryd process to browse and advertise services over your WiFi interface. You’ll see an immediate reduction in WiFi speeds that will continue for a minute or two while the AWDL interface continues to browse/advertise. You can even cause the issue by waking a nearby iOS device that then begins a browse and advertise of services affecting surrounding devices.
The solution? Until Apple issues a real fix, Ciabarra has released a Cydia package called WiFried. The package will allow you to enable/disable your D2DWiFi/AWDL and can be conveniently turned off/on under the AirDrop settings in Control Center.
Notably, this issue is said to also affect OS X Yosemite. You can disable AWDL and AirDrop in OS X Yosemite by typing the following command in Terminal:
sudo ifconfig awdl0 down
You can restore AirDrop and AWDL (and the WiFi issues) by typing this command:
sudo ifconfig awdl0 up
You can find more details at the link below. If you've been experiencing Wi-Fi issues in iOS 8 and this tweak fixes things, please let us know in the comments!