Bitrabo Editorial
Throughout Ethereum’s history, high transaction fees have been a significant concern in the cryptocurrency market, leading users to explore alternatives for their daily transactions. However, recent developments in Ethereum’s gas fees suggest a potential surge in adoption as transaction costs have decreased to unprecedented levels.
Ethereum Gas Fees Decrease Following Network Improvements
The Ethereum network, a preferred choice for cryptocurrency transactions, has witnessed a substantial drop in gas prices to historic lows. This decrease brings relief to users and developers who have long struggled with high transaction fees.
EgyHash, a crypto trader and on-chain analyst, highlighted this development in a recent research study shared by CryptoQuant, a prominent on-chain data provider. According to the expert, the daily mean gas price of ETH reached an all-time low of approximately 2.9 Gwei.
Additionally, the network’s daily mean fees in US dollars hit a multi-year low of around $0.85. Consequently, the daily mean burn rate plummeted to a historic low, with approximately 115 ETH burned daily.
While the reduction in gas fees and burn rate is noteworthy, EgyHash pointed out that Ethereum’s daily mean transactions have either remained stable or exhibited positive growth compared to the same period in the previous two years.
This decline is primarily attributed to the recent introduction of the Dencun Upgrade in March this year. This upgrade introduced Blobs transactions, facilitating data publication on Ethereum with a significant fee reduction, up to 100%, for Layer 2 networks like Arbitrum, Base, and Optimism, among others.
The decrease in transaction fees could potentially benefit Ethereum by making the platform more accessible and cost-efficient for new applications, including NFTs and DeFi.
With transaction costs hitting new lows, optimism surrounding Ethereum’s future and user experience is likely to increase among the community. This development underscores the team’s commitment to establishing a more sustainable network, reinforcing its position as a frontrunner in the blockchain industry.
Effect of Fee Reduction on Investors
While lower gas prices are advantageous for users and developers, EgyHash believes it may not be favorable for investors. This is attributed to a considerable portion of ETH usage shifting to layer 2 solutions, potentially leading to challenges such as user fragmentation and liquidity issues.
Since the launch of the Decun Upgrade, ETH’s price has been volatile, experiencing a 35% decline even after the approval of Spot Ethereum ETFs. Simultaneously, the total supply of ETH has surged by approximately 197,000 coins, valued at $500 million.