Ethereum
Ethereum Supply Becomes Inflationary as Gas Fees Drop to Record Lows
THE Ethereum The ecosystem is experiencing a historic drop in gas fees, impacting mainnet and Layer 2 transactions.
According to Etherscan Gas DetectorThe average gas fee on the mainnet is 4 Gwei at press time, or about $0.21. However, transactions can be processed for as little as 3 Gwei, or about $0.14.
This decline extends to the blockchain network Layer 2 Solutions— including Optimism, Base, Arbitrum and Linea — whose fees are less than $0.01 through Gasfees.io data.
Market watchers said the drop in fees is mainly due to increased usage of Layer 2 scaling solutions and the adoption of blob transactions introduced with the Dencun hard fork in March—the upgrade helped reduce transaction costs on Layer 2 networks and had a significant impact on the network.
Effect of ETH Gas Fee Drop
Due to the lower fees, less ETH is burned, making inflationary network.
In the last 24 hours, less than 200 ETH were burned, leading Ethereum’s supply to become inflationary with a growth rate of 0.67%, according to data from ultrasound.moneyOver 60,000 ETH have been added to the network in the last 30 days.
OKX Ventures noted that this continues a trend seen in Q2, when a 66.7% drop in the burn rate impacted ETH’s supply-demand balance. added:
“As network activity slows and burns decrease, Ethereum’s supply and inflation management will be crucial.”
Ethereum ETF
Meanwhile, analysts have pointed out that the recent launch of Ethereum Exchange Traded Funds (ETFs) adds additional complexity to the Ethereum ecosystem.
Last week, the SEC approved eight new spot Ethereum ETFs, including Grayscale’s ETHE fund conversion, for trading on U.S. exchanges.
These products saw inflows exceeding $1 billion in their first four days of trading, although this was offset by an outflow of around $1.5 billion from Grayscale’s ETHE.
However, crypto analyst Koffi believes these trends show the network is in a “good position.” wrote:
“The Ethereum ecosystem is affordable for end users and new capital is flowing into the system. I think we are in a good place.”