HomeEthereumEthereum Gas Fees Drop to Lowest Level Since 2020

Ethereum Gas Fees Drop to Lowest Level Since 2020


The Impact of Ethereum’s Dencun Upgrade on Transaction Costs and Activity

The average cost of transacting on Ethereum has hit its lowest level since January 2020, thanks to the migration of activity from the base layer to layer 2 networks. This shift has been further accelerated by the Dencun upgrade that took place in March, which significantly reduced fees for layer 2 networks. As a result, gas prices on Ethereum have dropped by about 92%, from 63 gwei to around 5 gwei.

According to data from blockchain explorer Etherscan and analytics platform Ycharts, the number of active and upcoming layer 2 projects has reached 95. Users have been transferring more crypto assets to various layer 2 scaling rollups, with top networks like Arbitrum, Optimism, and Base experiencing a surge in daily active addresses.

Andrew Van Aken, a data scientist at blockchain analytics firm Artemis, noted that there has been a noticeable increase in bridge activity across layer 2 networks, with weekly volumes rising from around $170 million to $300 million. Additionally, Ethereum has seen over $3 billion in net outflows of ETH in the past three months, with a majority of the funds flowing to layer 2 solutions such as Arbitrum, zkSync, Base, Starknet, and Optimism.

The decrease in transaction costs on Ethereum reflects the evolving blockchain landscape, with users opting for cheaper alternatives and tailored ecosystems for specific use cases. The Dencun upgrade has had a significant impact on Ethereum’s transaction fees, with the amount of fees paid by end users plummeting since its implementation. This has also led to a decrease in the amount of ETH burned, as the new supply of ETH is growing at the fastest daily rate since the Merge.

Despite reaching a multi-year high of $4,000 on the day of the Dencun upgrade, the price of ETH has since dropped by approximately 25% to around $3,015. The future of Ethereum post-Dencun upgrade remains uncertain, but the shift towards layer 2 solutions and lower transaction costs is a positive sign for the network’s scalability and usability.


Trading Begins for Ether ETFs, Initial Inflow Data Released

Ether ETFs See Strong Inflows in First 15 Minutes of Trading, Bitwise Leads the Pack Ether ETFs Make Strong Debut on Stock Exchanges, Attracting $112...

Epic Games CEO Hints at Blockchain Integration for Fortnite, Rules Out Crypto and NFTs

Epic Games CEO Teases Blockchain for Fortnite, No Crypto or NFTs - Technical Potential Over Financial Uses Epic Games CEO Tim Sweeney has hinted at...

XRP Outperforms BTC, SOL, and ETH on Binance, Coinbase, and Kraken in Key Metric

XRP Surpasses Bitcoin, Solana, and Ethereum in Trade Volume on Major Exchanges The cryptocurrency market is buzzing with excitement as XRP, the digital asset associated...

Asset manager predicts that Trump administration could designate Bitcoin as a strategic reserve asset

Bitcoin's Potential as a Strategic Reserve Asset Under a Future Trump Administration Asset manager Bryan Courchesne recently made a bold prediction on CNBC, suggesting that...

Most Popular