Ethereum fees drop to seven-month low as L2 competition heats up

Transactional fees on the Ethereum network recently dropped to a seven-month low, reaching $1.7 per transaction on May 12.

The average transaction fee on the Ethereum network has dropped to the lowest level in seven months as layer-2 networks become more attractive for frequent transfers. According to data from BitInfoCharts, Ethereum’s average transaction fee dropped as low as $1.7 on May 12, a level last seen in October 2023, when ETH price was below the $2,000 mark.

With Ethereum’s Dencun upgrade, fees also dropped on top layer 2 networks significantly, making them more attractive for everyday usage. As per stats from L2Fees, swap token operations on main layer-2 networks are now less than $0.5, a substantial difference compared to Ethereum’s mainnet, where users would have to pay over $4 to swap one token to another.

Meanwhile, Ethereum co-founder Vitalik Buterin has proposed addressing the limitations of the existing commission system through multidimensional gas pricing. Ethereum utilizes a peer-to-peer model where all computing processes, including storage, data transfer, and encryption operations, are measured in a single metric known as “gas.”

Buterin argues that the current approach leads to inefficient utilization of computing power and may result in the inclusion of unsafe blocks in the blockchain. Proposing a shift to a multidimensional gas model, he suggests that this approach could better reflect the network’s true constraints and capabilities, potentially enhancing capacity without compromising resource fungibility.