Ethereum
Ethereum records lowest gas prices since 2016
Alex Dovbnia
This also means that Ethereum is no longer a deflationary network.
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On June 30, the Ethereum network checked in its lowest fees since 2016. According to data provided by Etherscan, the average gas fee currently stands at just 3 Gwei ($0.14), according to data provided by Dune Analytics.
Gas fees refer to the cost of various operations on the Ethereum blockchain. By paying gas fees, users help keep the network secure. In addition to incentivizing validators, gas fees also aim to prevent various spam attacks.
During the 2021 bull run, Ethereum gas fees were extremely high due to high demand in the non-fungible (NFT) sector. This prompted some experts to argue that the network was unsustainable and gave rise to more affordable alternatives such as Solana.
This time around, Ethereum gas fees are reaching extremely low levels despite the fact that the network is also experiencing high transaction activity. In fact, the volume of the leading altcoin is at the same level as at the beginning of the year.
The drop in costs can be explained by a higher level of efficiency of the Layer 1 market due to the combination of Layer 2 volume and the introduction of “blob transactions” with EIP-4844 which helped to significantly increase the scalability of Ethereum.
“We will still see gas peaks above 15 gwei during periods of higher activity. It’s just that overall the gas market has been more efficient after 4844. So we will have more affordable days than more expensive days,” said Brian Smocovich, founder of Pistachio Fi. said in a post on the social network X.
Back to inflation
The massive drop in fees means that Ethereum is no longer a deflationary network since the amount of fees to burn is very low. This goes against those who advocated “ultra-sound currency” before the Dencun upgrade.
Over the past seven days, 14,393 ETH have been added to the network, according to data provided by ultrasound.money. This translates to a year-on-year supply growth of 0.62%.
The total supply of Ethereum currently stands at 120,185,061 ETH, meaning it is on track to reach a new high in 2024.
About the Author
Alex Dovbnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader, and journalist with extensive experience covering everything related to this booming sector, from price analysis to blockchain disruption. Alex has authored over 1,000 articles for U.Today, CryptoComes, and other fintech outlets. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets. He can be reached at alex.dovbnya@u.today.