Need to use the Ethereum blockchain? Take advantage of low rates while they last. Ethereum fees are at levels not seen since September 2021.
- Migration of users to other blockchains may cause low fees on Ethereum.
- A month ago, it came to pay almost five times more than now, on average, to use Ethereum.
Fees on the Ethereum network have been at their lowest level, on average, in the last five months. When writing this article, the amount expressed in U.S. dollars is $13.9. Data from block explorers show a similar average of commissions not seen since last September.
Last January 10, Ethereum saw an average transaction size almost five times higher than today: $53. Unlike on other blockchains, Ethereum’s fees are not only for sending money (i.e., transactions in the native ether currency) but also for interactions with Smart Contracts. The latter includes, for example, trading transactions on non-fungible token (NFT) marketplaces, movements on decentralized finance (DeFi), or shipments of ERC-20 tokens, e.g., tether (USDT), DAI, or Shiba Inu (SHIB), among others. Gas limits the amount of computation running in a Smart Contract. Gas expenditures are helpful when a poorly programmed code loops forever, for example, since the Ethereum Virtual Machine (EVM) uses programming languages that are Turing Complete, such as Solidity.
Why did Ethereum fees drop?
The average fee chart does not provide a definite cause for the drop in fees, but we can think that it is due to the migration of users to other blockchains. BSC, Solana, or Fantom have scraped some of the markets, usually in the hands of Ethereum.
Also, layer 2 solutions, such as Polygon sidechain, help decongest the network. Something similar happens with rollups, Ethereum’s second layers, that bundle transactions and execute them outside the main network.
It would not be unusual that, in a few days, Ethereum fees will again increase significantly in value. If the low amounts of trade on the network attract massive users again, the network will become congested, and the cycle will repeat itself.
Ethereum remains the blockchain of choice for dApps and Smart Contracts. Despite the expensive and slow user experience that Ethereum’s mainnet can offer in its current state, the blockchain created by Buterin nearly monopolizes the market for DeFi and decentralized applications according to the trading volume and total value locked (TVL).
The Block’s metrics show that the value locked in Ethereum significantly outperforms its major competing blockchains – Terra, Binance Smart Chain, Avalanche, and Fantom, plus ten other smaller networks.