Ethereum Median Gas Price Hits 5 Year Low
13 Aug, 2024 ● Coin news
The median cost to process a transaction on the Ethereum blockchain has dropped to a five-year low, with fees for low-priority transactions falling to around 1 gwei or less, as activity on layer-2 networks continues to rise.
On Aug. 10, Ethereum’s median gas fees decreased to 1.9 gwei, according to data from Dune Analytics.
This marks the lowest level since mid-2019 and represents a nearly 98% decline from the year-to-date high of 83.1 gwei recorded in March.
Etherscan data from Aug. 12 shows that low-priority Ethereum transactions, which are typically processed within about 10 minutes, were priced at 1 gwei, roughly equivalent to seven cents.
In March, Ethereum’s Dencun upgrade implemented nine Ethereum Improvement Proposals (EIPs), one of which introduced data blobs, also known as proto-danksharding, aimed at reducing transaction costs on layer-2 blockchains.
Ethereum's scaling strategy relies heavily on layer-2 blockchains, which manage more transactions at a lower cost by processing them off the main layer-1 Ethereum blockchain, while still using the L1 for transaction verification.
Commenting on the recent drop in gas fees, Gnosis co-founder Martin Köppelmann posted on X on Aug. 10, stating that “Ethereum needs to get more L1 activity again.”
Köppelmann expressed concern that gas fees of at least 23.9 gwei are necessary to sustain staking rewards, which are payouts given to those who help validate blockchain transactions.
“Even if it sounds counterintuitive at such low rates, raising the gas limit can be part of a strategy,” he added.
Activity on Ethereum’s layer-2 networks has significantly surpassed that on the base layer, with L2Beat data indicating that the Base network handled over 109 million transactions in the last 30 days, compared to Ethereum’s 33 million.
Additionally, layer-2 networks Arbitrum and Taiko processed a combined total of 97 million transactions over the same period.
As fewer Ether tokens are being used in transactions and as payouts to stakers, the supply of Ether has increased significantly, with nearly 13,400 ETH worth $34.1 million added to the supply in the past seven days, according to data from ultra sound money.
Sources:
https://cointelegraph.com/news/ethereum-median-gas-fees-five-year-low
https://dune.com/queries/2981260/4944197
https://x.com/DarrenSRS/status/1822785510638825662
https://x.com/koeppelmann/status/1822394564566745417
https://l2beat.com/scaling/activity?sort-by=30d-count&sort-order=desc
