Ethereum
Ethereum records lowest gas prices since 2016
Alex Dovbnia
This also means that Ethereum is no longer a deflationary network.
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On June 30, the Ethereum network checked in its lowest fees since 2016. According to data provided by Etherscan, the average gas fee currently stands at just 3 Gwei ($0.14), according to data provided by Dune Analytics.
Gas fees refer to the cost of various operations on the Ethereum blockchain. By paying gas fees, users help ensure the security of the network. In addition to incentivizing validators, gas fees are also intended to prevent various spam attacks.
During the 2021 bull run, Ethereum’s gas fees were extremely high due to high demand in the non-fungible token (NFT) sector. This prompted some experts to claim that the network was unsustainable and gave rise to more affordable alternatives such as Solana.
This time around, Ethereum’s gas fees are reaching extremely low levels despite the network also seeing high transaction activity. In fact, the volume of the leading altcoin is at the same level as at the start of the year.
Diving costs can be explained by a higher level of efficiency of the Layer 1 market due to the combination of Layer 2 volume and the introduction of “blob transactions” with EIP-4844 this helped to significantly increase the scalability of Ethereum.
“We will still see gas peaks above 15 gwei during periods of higher activity. It’s just that overall the gas market has been more efficient after 4844. So we will have more affordable days than expensive days,” said Brian Smocovich, founder of Pistachio Fi. said in a post on the social network X.
Back to inflation
The massive drop in fees means that Ethereum is no longer a deflationary network since the amount of fees to spend is very low. This goes against those who advocated the “ultra-sound money” narrative before the Dencun upgrade.
Over the past seven days, 14,393 ETH have been added to the network, according to data provided by ultrasons.money. This translates to an annual supply growth of 0.62%.
The total supply of Ethereum currently stands at 120,185,061 ETH, meaning it is on track to reach a new peak in 2024.
About the Author
Alex Dovbnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience covering everything related to this booming industry, from price analysis to blockchain disruption. Alex has authored over 1,000 articles for U.Today, CryptoComes and other fintech media. He is particularly interested in regulatory trends across the world that are shaping the future of digital assets. He can be contacted at alex.dovbnya@u.today.