The Ethereum (ETH) network has long been faced with extremely high transaction fees or gas fees required to complete a transaction. Now these costs have taken a nosedive.
Huge increase in gas costs
Average transaction fees on Ethereum’s network have dropped to 0.0015 ETH per transaction, or about $1.51. Gas costs have not been at such a low level since December of 2020.
A major reason for the rise in gas costs on the ETH network is the huge popularity of NFTs and decentralized finance (DeFi). A bull market that was promising at the time also attracted additional investors, which in part increased gas costs.
These costs were significantly increased as between January of 2021 and May 2022, the average gas fee on the Ethereum network was about $39, according to data sourced from BitInfoCharts†
Reducing gas costs
The fact that these gas costs are now lower appears to depend in part on a decline in the daily number of NFT sales. This number is now at its lowest point of the year. The NFT ecosystem posted its worst performance of the year in June when total daily sales fell to around 19,000 with an estimated value of $13.2 million.
Ethereum co-founder VItalik Buterin made a proposal in November of 2021 to reduce gas costs and ease unprecedented strain on the network. For example, he had proposed a short-term solution to reduce rollup costs by introducing a call data limit per block. These costs now appear to be at a low level again. However, it is not known how long these costs will remain here.
