Ethereum (ETH) transaction fees have reached their lowest levels since 2022, marking a significant milestone for the second-largest cryptocurrency by market capitalization.
According to detailed information from Ryan Selkis, the founder and CEO of Messari, the average fee for transferring ETH is $1.83, while the cost of purchasing tokens through Uniswap is around $4.17.
However, the reduction in gas fees isn’t just about lowering transaction costs; it has also led to Ethereum entering a period of inflation. In the past week, the Ethereum supply has increased by 4,092 ETH tokens, with a total value of about $6.6 million.
At the beginning of 2023, Ethereum’s on-chain activity experienced a surge, driven by the volume of NFT transactions and the buzz surrounding the Blur token airdrop. However, activity has since tapered off.
Analyzing this context, Selkis emphasizes the current market’s bearish sentiment, stating:
“We are sinking deeper into a trend of ETH being inflated.”
This observation highlights the impact of reduced demand and decreased trading volume on Ethereum’s overall supply dynamics.
Analyzing statistics on fees and gas usage from Messari, Ethereum has recorded fees worth $2.24 million in the last 24 hours, with an average fee of $2.59.
Gas used during this time reached 108,194,133,311, with an average gas limit of 124,856. These figures provide an in-depth view of transaction volume and activity within the Ethereum network, which significantly affects Ethereum.
Firstly, lower gas fees can benefit Ethereum users by reducing transaction costs and interactions with decentralized applications (dApps) built on the Ethereum Blockchain. Lower fees can encourage wider adoption and increased network usage.
Secondly, the shift towards a period of inflation underscores the importance of monitoring supply dynamics and market conditions.
As new tokens are issued, and the supply increases, it can affect the overall perceived value of Ethereum and its ability to maintain token scarcity, a crucial factor in driving its price higher.
In summary, Ethereum transaction fees have reached their lowest levels since 2022, primarily due to reduced on-chain activity related to NFT sales, meme coin trading, and Telegram bot activity.
This reduction in gas fees has led to a period of inflation for ETH, with its supply increasing. Monitoring these developments is essential to understand the network’s performance and its significance in the broader cryptocurrency market.
At the time of writing, ETH has declined by more than 3% in the past 24 hours, resulting in a trading price of $1,552. Furthermore, this downward trend persists across various timeframes, with decreases of 4.5% in the last seven days and 5.5% and 15% in the 14-day and 30-day periods, respectively.