The Block: Transaction Prices on the Ethereum Network Have Decreased

According to The Block, the gas fees for transactions on the Ethereum network have drastically decreased since 2021.

According to the paper, the Ethereum network reached its zenith during the DeFi summer and had a surge in 2021 with the release of non-fungible tokens (NFT).

As of September 22, according to data from The Block, gas fees for the blockchain platform were at their lowest level in recent memory.

According to Ycharts.com, the average gas price for Ethereum on September 25 was 10.96 Gwei, while the highest price was 474.57 Gwei on May 1, 2022, a decrease from 50.96 one year earlier. The difference from yesterday is 20.73%, while the change from a year ago is -78.50%.

As of June 11, 2020, the average gas prices even rose to an all-time high (ATH) of 709.71 Gwei, a significant increase from the current level.

Gas prices have decreased, but Ethereum transaction volume and everyday active users have not. The Block claims that the most likely reason for this is that users who are transacting do not believe they should have to pay significant fees in order to finish their transactions swiftly.

According to Simon Cousaert, a data analyst at The Block Research, “customers are not in a rush and are not prepared to pay extra for their transactions to go through sooner.”

The overall number of transactions and the number of active accounts on the Ethereum network, according to the research, do not indicate statistics are approaching all-time lows. In reality, though, both have climbed by around 20% and 60% during the last two years, respectively.

According to data from The Block, Uniswap, OpenSea, and ETH transfers were the smart contracts that used the most gas recently.

During the whole 14-month period, NFT marketplace OpenSea contributed significantly to a sizable share of the total gas usage, but its contribution has decreased significantly since January.

The Block said that this made other network transactions, such transfers and token swaps, astronomically more expensive.

The Layer 2 space has experienced substantial expansion. According to the report, optimistic rollup solutions like Arbitrum and Optimism had the most increase.

Even if transaction prices are falling to new lows, transaction counts on the top optimistic rollup alternatives are increasing.

Under another development, statistics from Ethereum tracker Ultrasound Money revealed that the most recent upgrade to Ethereum (the Merge) is reducing the supply of Ether (ETH) in the proof-of-stake (PoS) consensus.

But before becoming deflationary, the second-largest cryptocurrency could still have a long road ahead to go.

The Ethereum blockchain upgrade made several significant commitments, including to increase network scalability and efficiency, decrease the quantity of ether to make it a deflationary asset, among other things.

According to metrics from the website Ultrasound Money, after the Merge event, there has been an increase in the supply of Ether on the proof-of-stake network of more than 5,990. However, the evidence indicates that this number is lower than it would have been underneath the proof-of-work consensus approach. Additionally, the quantity is considerably less than that of Bitcoin, whose system generates 6.25 BTC coins every 10 minutes using the proof-of-work algorithm. The Ultrasound Money platform claims that if the coins from block subsidies are less than the ones being burned, Ether can start to deflate. Additionally, ETH will turn into a deflationary asset if more people start using it for transactions than are staking it.

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