Ethereum
Ethereum gas fees at rock bottom as network activity soars
Average gas fees on the Ethereum mainnet fell below three gwei as transactions on layer 1 and layer 2 protocols hit an all-time high.
Ethereum’s median gas fees have fallen below three gwei.
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Posted June 24, 2024 at 3:44 AM EST.
Median gas prices on Ethereum have fallen to their lowest level in years despite skyrocketing network activity. Dune data compiled by @hildobby watch that mainline gas prices fell below three gwei on Friday for the first time since early 2020.
Gas prices represent the cost needed to complete a transaction on Ethereum. In dollars, the drop in gas prices equivalent to swap on Uniswap for $1.06, trade an NFT on Seaport for $1.49, and transfer ETH on-chain for $0.23, according to data from GasFees.io. When transacting on a Layer 2 network like Base, which incorporates “blob” transactions, fee levels are further reduced. A Uniswap swap on Base costs $0.0016 in fees, a Seaport swap costs $0.0021, and an Ethernet transfer costs $0.00026.
According to Brian Smocovich, founder of Pistachio.fi, the lower fee levels on the network are not the result of a slowdown in transaction activity, but rather the effect of a more efficient fee market.
“Ethereum volume per day is the same or even higher than 6 months ago. L1 [layer 1] the fee market is now more efficient thanks to L2 [layer 2] volume and EIP-4844, ” said Smocovich on X.
“The L1 gas market is now more efficient because most volumes are in L2s, the L2 -> L1 settlement is 100 times cheaper than before 4844, and we have the efficiency of the EIP gas market – 1559,” he said. added.
He noted that gas is at an all-time low while network activity is at an all-time high, citing L2Beat data which shows that layer 1 and 2 protocols checked in an average of 299 transactions per second on June 21.
The flip side of lower gas fees is its impact on network supply dynamics, particularly that of Ethereum. combustion rate which is now at its lowest level in 12 months.
EIP-1559, introduced via the London hard fork, introduced base fees related to usage that would be burned or removed from supply. With a lower amount of fees to burn, ether supply has become slightly inflationary and is at a growth rate of around 0.56% per year, according to ultrasound.money.