The average transaction fee on the Ethereum (ETH) blockchain network has plummeted to 0.0015 ETH, or $1.57. The last time Ethereum saw such low gas fees was in December, 2020.
Between January 2021 and May 2022, gas fees required by Ethereum were $40 on average – with the highest gas fees at $196.638, recorded on May 1st, 2022.
January 2021 marked the start of a series of gas fee surges on the Ethereum blockchain, resulting from the hype from non-fungible tokens (NFTs), decentralizsd finance (DeFi), and a promising bull market.
Ethereum’s co-founder Vitalik Buterin has previously faced criticism for outrageous gas fees for the blockchain network. In November 2021, Buterin published a decrease-cost-and-cap proposal to reduce unexpected levels of strain on the network. In addition, Buterin has proposed a short-term solution to lower ETH gas costs by introducing a call-data limit per block.
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Ethereum’s gas price drops also coincide with the current crypto bear market, which is also marked by record lows in NFT sales in June 2022. The crypto market is not just in turmoil–fiat finance has also faced negative impacts as a result from international conflict, increased regulatory practices and scrutiny, resource shortages, rising inflation, and hikes in interest rates.
The sudden drop in gas prices can also create opportunities for more users to adopt Ethereum as a preferred currency. Ethereum is known for its extremely high transaction fees and slow processing speeds despite it being a preferred network for the development of decentralized applications (dApps).
