One of the biggest pitfalls of the Ethereum (ETH) network is the fact that transaction costs, either gas parties, become virtually unaffordable when the network becomes crowded. This is also one of the reasons that Ethereum could never really go mainstream in this state. However, lately we see that gas fees have fallen sharply and are now only 0.0015 ETH. The lowest level in a long time.
Extremely high transaction costs
For nearly two years, between January 2021 and May 2022, the average gas fees on the Ethereum network were about $40. Out info from BitInfoCharts It turns out that the gas fee was highest on May 1, 2022, with a price of $196.63.
Now that the transaction costs for the Ethereum network have fallen to 0.0015 ETH, or $1.57, we are back at the level where it was in December 2020.
The madness started just a month later. The sharp rise in the gas price was due to the introduction of non-fungbile tokens (NFT), decentralized finance (DeFi) and the start of a bull market.
Still, a solution seemed to be in the works. In November 2021, Ethereum co-founder Vitalik Buterin came up with a “decrease-cost-and-cap” proposal to take some pressure off the network.
Interest in NFTs is declining
One of the reasons that transaction costs on the Ethereum network have fallen so much is the fact that NFTs are no longer as popular as they used to be. As we saw yesterday, the number of NFTs traded in June 2022 is at its lowest point in over a year. In total, only 19,000 NFT were traded for a total value of $13.8 million.
However, the fact that the average transaction costs on the network have now fallen so sharply does not mean that this will remain the case. If Ethereum wants to keep up, something has to be done about the high transaction costs for when there is another Ethereum-based hype or bull market. In any case, the team behind Ethereum is aware of these issues and wants to solve the network congestion with updates in the future.
