Legal Notice: Nothing on the website constitutes professional and/or financial advice. All the content on the website is for informational purposes only. We have prepared all information herein from sources we believe to be accurate and reliable. However, such information is presented as is,” without warranty of any kind – whether expressed or implied. You acknowledge and agree that there are numerous risks associated with purchasing cryptocurrencies.

CDS Crypto News Ethereum Gas Fees Hit Five-Year Low as Layer-2 Networks Surge

Crypto News

Ethereum Gas Fees Hit Five-Year Low as Layer-2 Networks Surge

sevval12/08/20241 Mins read95

Https://Cryptodataspace.com/Wp-Admin/Post.php?Post=229240&Amp;Action=Edit

Ethereum Gas Fees Plunge: Layer-2 Networks Drive Costs to New Lows

Ethereum Gas Fees– The median price for sending a transaction on the Ethereum blockchain has hit a significant milestone, dropping to its lowest point in five years. As of August 10, Ethereum’s median gas fees have plummeted to just 1.9 gwei, marking an almost 98% decrease from the peak of 83.1 gwei seen earlier this year in March.

Table of Contents

Layer-2 Networks Fuel the Gas Fee Drop

Recent data from Etherscan reveals that low-priority transactions, those that take around 10 minutes to process, are now priced at approximately 1 gwei, which is about seven cents. This dramatic reduction in transaction costs is attributed to the increasing activity on Ethereum’s layer-2 networks. These networks handle a higher volume of transactions more cost-effectively by operating off the main Ethereum blockchain while still leveraging it for transaction verification.

Impact of the Dencun Upgrade

Ethereum Gas Fees Hit Five-Year Low As Layer-2 Networks Surge

Ethereum’s latest Dencun upgrade, implemented in March, has been a key factor in this decrease. Among the nine Ethereum Improvement Proposals (EIPs) introduced, one notable proposal involved data blobs, also known as proto-danksharding. This upgrade was specifically designed to reduce transaction costs on layer-2 blockchains, significantly contributing to the current low gas fees.

Market Reactions and Future Concerns

Despite the drop in gas fees, there are concerns about Ethereum’s long-term health. Gnosis co-founder Martin Köppelmann highlighted on X that Ethereum requires increased layer-1 (L1) activity to sustain itself. Köppelmann pointed out that a minimum of 23.9 gwei is necessary to adequately fund staking rewards for those validating blockchain transactions.

Layer-2 Networks Outpacing Layer-1

Activity on Ethereum’s layer-2 solutions, such as Arbitrum and Taiko, has far surpassed that of the base Ethereum blockchain. Data from L2Beat shows that Base alone processed over 109 million transactions in the last 30 days, compared to Ethereum’s 33 million. Combined, Arbitrum and Taiko have added another 97 million transactions during the same period.