- The mainnet gas fees for Ethereum have reached their lowest point in more than four years.
- The average cost of the Ethereum mainnet fell below one Gwei, however it has subsequently somewhat increased.
- Discussions over this reduction’s impact on Ethereum’s supply dynamics have been triggered.
- Special welcome bonus of 260 USDT offered by M2 Exchange.To unlock, join M2.
Because more transactions are being made on the layer-2 networks of the network, Ethereum gas fees have fallen to their lowest point in some years.
Users may now transact on-chain much more affordably thanks to this large decline, which has also sparked debate over the long-term implications for the network.
Ethereum Lowers Gas Fees, Increasing Supply
The average gas charge on the Ethereum mainnet dropped below 1 Gwei yesterday, but it has since increased to about 2 Gwei, or roughly $0.06, according to Etherscan data. Certain transactions, however, can still incur costs of up to 5 Gwei, or around $0.22.
The Layer 2 scaling methods offered by Ethereum also exhibit a discernible decrease in fees. The average fees on Optimism, Base, Arbitrum, and Linea are presently less than $0.01, according to data from Gasfees.io.
Market watchers speculated that the decrease in gas fees might be related to the Dencun upgrade’s implementation of blob-based transactions in March. Because of the cheaper fees, this improvement has resulted in a large increase in Layer 2 transaction volumes.
To put things in perspective, L2beats data reveals that popular layer-2 networks like Base and Arbitrum currently handle a higher volume of transactions per second than Ethereum. Base completed 39.80 transactions per second (TPS) and Arbitrum completed 17.28 TPS in the last day. Ethereum, on the other hand, processed data at 12.17 TPS.
Certain stakeholders, including Martin Koppelman, the co-founder of Gnosis, have advocated for higher Layer 1 activity as a result of these trends.
However, worries about network inflation have been raised by the charge drop. The network’s supply of ETH has been increasing as less of it is being consumed.
Only 120 ETH were burned in the last day, according to Ultrasound.money, despite the fact that the supply rose by over 2,500 ETH. This disparity points to an increase in the supply of ETH, reversing the earlier trend of deflation.
In the next year, Ethereum’s supply might increase by around 943,000 ETH, or $2.5 billion, if this trend keeps up.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
