Ethereum gas fees at record low
Ethereum gas fees have seen a dramatic decrease, reaching their lowest levels in years. This drop is attributed to the increase in transactions on the second-layer network, making on-chain transactions more cost-effective for users.
Ethereum Gas Fee Reduction Impact
With the average gas fee on the Ethereum mainnet below 1 Gway, users are benefitting from more affordable transaction costs. However, there are still instances where fees can go up to 5Gway, highlighting the variability in costs.
The impact of this fee reduction is also seen in Ethereum’s layer 2 scaling solutions, with platforms like Optimism, Base, Arbitrum, and Linnea showing average fees lower than $0.01.
Market experts attribute the drop in gas prices to the Denkun upgrade in March, which introduced blob-based trading and led to increased Tier 2 transaction volume due to lower fees.
Stakeholder Concerns and Strategies
While the decrease in fees is welcomed by users, some stakeholders, like Gnosis co-founder Martin Koppelman, advocate for increased first-tier activity. Koppelman suggests that raising gas limits could boost underlying usage, even with lower fees.
On the flip side, the fee reduction has raised concerns about potential inflation in the Ethereum network. As the amount of Ethereum burned decreases, the network’s supply increases, potentially disrupting the deflationary trend observed previously.
Future Outlook for Ethereum Supply
Data from Ultrasound.money shows a minimal destruction of Ethereum in the past day, resulting in a supply increase of over 2,500. This imbalance could lead to a significant increase in Ethereum supply, counter to previous deflationary trends.
If this trend continues, Ethereum’s supply could see a substantial increase next year, equivalent to billions of dollars. This raises questions about the long-term implications of the current fee reduction on the network’s overall dynamics.
