Ethereum Network Fees Falls to Seven-Month Low
- Ethereum network fees have dropped below $10 for the first time since August.
- The network is still more expensive to use than rival blockchains.
- ETH prices are still down trending, having lost 10% over the past week.
Gas prices on the Ethereum (ETH) network have been a bane to anyone using it over the past year or so. They have surged to astronomical highs on several occasions during the 2021 bull market.
Average transaction fees skyrocketed above $60 in May, September, and November last year and have remained above $25 for the past five months or so. Things got so bad that Ethereum was dubbed a “whale chain” last year because only the big bag holders could afford to use it.
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Transaction fees vary depending on the operation. A simple ERC-20 token transfer is the cheapest action on the network. A complex smart contract interaction, on the other hand, will cost a lot more gas.
Fortunately, things appear to have calmed down on the Ethereum network, and as a result, gas prices have tumbled.
Gas Fees Falling
The average cost of a transaction on the Ethereum network has fallen below $10. This is its lowest level since early August, according to Bitinfocharts.com.
The analytics platform currently reports an average transaction fee of $8.78 on the Ethereum network. The average had fallen by 83% since the last peak of January 10 when it touched $50.
Blockchain explorer Etherscan reports that the average transaction fee has fallen to $1.38 as of March 9. Either way, it is good news for those using the network.
Ethereum is still more expensive than rivals such as Cardano, Polkadot, and Solana but is still the industry standard for smart contracts.
Additionally, Ethereum is set to switch to proof-of-stake consensus in the coming months, and scaling upgrades are scheduled to follow. These will alleviate some of the painful costs of using the network when rolled out later this year.
One upshot of the high fees has been more ETH burnt through the EIP-1559 mechanism. Last year, this upgrade was introduced to ‘burn’ or destroy a portion of the transaction fees.
So far, 1.96 million ETH has been burnt through the process, worth an estimated $5.2 billion at current prices.
ETH Price Outlook
Ethereum prices are down 2.7% over the past 24 hours, trading at $2,641 at the time of writing. Being in a downtrend, ETH has lost almost 11% over the past week. However, last week saw a $25 million capital inflow into Ethereum-based institutional crypto funds.
ETH is currently down 45% from its November 10 all-time high of $4,878. Comparatively, Bitcoin has lost 41% since its peak on the same day last year.