Ethereum: gas fees at an all-time low

Compounded by the crisis in the crypto markets and the decline in traffic on its blockchain, Ethereum’s gas fees have fallen back below $3 on average.

Gas fees on Ethereum drop to record levels

If you want to see something positive in this heavy drop in all major cryptocurrencies, with declines of more than 50% in just a few months, gas fees, or the fees for making transactions on Ethereum, have dropped to their lowest level in more than 10 months.

Since January, in fact, gas fees on the ETH blockchain have dropped by more than 90%, once again reaching $3 on average.

Last Sunday, the cost of gas on Ethereum’s blockchain hit $2.95 (this had last happened in July 2021), according to data collected by the company Nansen. The average in the first quarter of 2022, on the other hand, dropped to $3.5, compared to around $26.89 in the last quarter of 2021. 

According to data from a report by crypto firm Bankless, revenue from gas fees amounted to $2.4 billion for Ethereum in the first quarter of 2022, down 44% from $4.34 billion in the fourth quarter of 2021, with 87% of the revenue, or about $2.1 billion in ETH tokens, reportedly burned.

Gas fees for medium-sized transactions also fell to just above $1.5 on average from over $8 three months ago.

The coincidence with the NFT market and costs per transaction type

Interestingly, this drop in fees coincided with the passing of the first million NFT buyers on the Ethereum blockchain.

The Ethereum network, despite having suffered a decline in the number of users at the expense of other blockchains, precisely because of the high cost of transactions, still retains a very large share of the NFT market, with over 90% of the total. 

The cost of a sale on OpenSea is now about $10.63 at the high end and $10.26 for a lower fee. Exchanging coins on a decentralized exchange, such as Uniswap, now costs $9.69 at the high end, while at the low end it can cost as much as $9.36 per transaction.

The cost of transferring an ERC20 token, on the other hand, is about $4.37 per transfer. Layer 2 transfer fees for sending Ethereum (ETH) have also dropped to some of the lowest levels in recent months. Zksync transactions are about $0.04 to send Ethereum and $0.09 to exchange other coins. 

Loopring’s ETH transaction fees are always $0.04 per transfer, but exchanging a coin will cost $0.45 instead. Using Optimism costs $0.12 per Ether transfer, while on Arbitrum One it costs $0.23.

It therefore seems that even without waiting for the launch of the new Ethereum Arrow Glacier update, which is supposed to reduce transaction costs, Ethereum’s fees are starting to fall naturally.