With DeFi and NFTs, Ethereum (ETH) blockchain use has exploded. This has caused network saturation and rising transaction prices. That’s all in the past. Maybe. Gas fees on Ethereum fell to $1.57 on average. Lowest level in 20 months. At first, this performance seems good. On deeper analysis, this record is likely due to network user abandonment.
Gas fee record holder Ethereum
Ethereum has had a good year and won’t stop. The average Ethereum gas price is $2, according to YCharts. It fell to 21.18 Gwei on July 2, its lowest level in years. $1.57 at the time
To locate an ether with similar average transaction fees, you must go back to November 2020. At the time, they were worth 0.0034 ETH, or $1.55 USD.
Between January 2021 and May 2022, transactions cost $40 on average. On May 1, the network’s median cost was $196,638.
Gas fees on Ethereum were under a cent until July 2016. Then, as traffic grew, they ranged for a year between 0.01 and 0.1 dollars.
How can this decline be explained?
Ethereum is criticized for its transaction costs. Costs are a major factor in choosing the blockchain to use. Alternate layer 1 blockchains and layer 2 solutions are more cost-effective for developers, enterprises, and investors. It helped decongest the main network.
Market downturn has also contributed to this dynamic. ETH has lost about 77% of its dollar value since November’s all-time high, thus transaction fees take a knock after converting to dollars.
NFT frenzy is also on the decline. This sector has performed poorly in recent months. A June analysis by The Block shows weekly NFT sales decreased 70% from January to May 2022.
Ethereum is the frontrunner in smart contracts and DApps. People are leaving owing to excessive transaction fees. Recent fee cuts are one result of these abrupt departures. It’s not a good sign.
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