Ethereum Gas Fees Hit 4-Year Low: A New Era for ETH?
Ethereum network fees, also referred to as gas fees, are essential for processing transactions and carrying out smart contracts. The demand on the network determines these costs, which frequently increase during busy times. Although Ethereum is trying to cut prices by switching to proof-of-stake and Layer 2 scaling options, consumers may have to deal with erratic fees.
In this regard, on February 15, the Ethereum network’s 7-day moving average (7DMA) of transaction fees dropped to $0.77. Just one week earlier, this number was $2.57, indicating a 70% weekly decline. The last time Ethereum transactions were this inexpensive was in July 2020, as this decline drove transaction prices to their lowest dollar-term levels in more than four years.
Ethereum’s Gas Fee Collapse: Network Efficiency or Demand Crisis?
This pattern is further supported by the median gas fee on Ethereum, expressed in Gwei. The daily median gas fee averaged 1.61 GWEI over the previous week. On Saturday, February 15, it was the lowest since The Block started monitoring this indicator in January 2020, at 1.19 GWEI. Furthermore, this is only the second time since January 2020 that this number has fallen this low. The other decline was in September 2024.
As demonstrated by a recent slowdown in Ethereum‘s on-chain activity, a protracted decline in fees signals a wider lack of demand rather than increased network efficiency, even though declining fees normally boost user engagement. On Saturday, the 7DMA of Ethereum’s on-chain volume dropped 46% from the previous week to barely $4.19 billion. This data marks Ethereum’s lowest daily volume since November 7, two days after the US presidential election.
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