Ethereum Gas Fees Plummet Below 1 Gwei: A Game Changer for Users!

In Brief:

Ethereum's average gas fees have dropped below 1 Gwei for the first time in years, influenced by increased Layer 2 network transactions.

The reduction in fees has raised concerns about network inflation, with Ethereum's supply increasing as fewer ETH are burned.

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Ethereum Gas Fees Hit Historic Lows

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Ethereum's gas fees have plummeted to their lowest level in several years, driven by increased transactions on the network's Layer 2 solutions.

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According to Etherscan, the average gas fee on the Ethereum mainnet briefly fell below 1 Gwei, making on-chain transactions more affordable.

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This trend is also evident across Layer 2 networks like Optimism and Arbitrum, where fees are now below $0.01.

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Impact of Layer 2 Networks and the Dencun Upgrade

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The decline in gas fees is linked to the Dencun upgrade in March, which introduced blob-based transactions and boosted Layer 2 transaction volumes.

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Data from L2beats shows that networks like Base and Arbitrum now process more transactions per second than Ethereum itself.

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This has prompted discussions on whether to increase Layer 1 activity by raising the gas limit, despite low fees.

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Concerns Over Ethereum's Supply Increase

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While lower gas fees benefit users, they have also sparked concerns about network inflation.

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With fewer ETH being burned, the supply has been rising, counteracting previous deflationary trends.

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Ultrasound.money reports that only 120 ETH were burned recently, while the supply increased by over 2,500 ETH. If this continues, Ethereum's supply could expand significantly over the next year.