Ethereum Gas Fee Down to 50 Cents Because of Lower network Congestion
For the first time in about two years, Ethereum gas charges went to just 50 cents on March 14th, 2022. The Ether gas fee has been on a reducing trend for multiple weeks. Lower network congestion and the Ethereum fee burning have received credits for this trend.
Ethereum Fees Drop to 50 Cents
On March 14th, 2022, for the first time in about two years, Ethereum Gas charges were down to almost nothing. Multiple sources, including Arcane Research, indicate that the charges were at 10 cents.
For the past years, Ethereum gas charges have been a huge problem. In May 2021, Ethereum gas charges hit about 659 Gwei, over 60 times the current fee. The total fee in transactions hit $70.
However, the recent gas charge was as little as 10 Gwei per gas. 1 Gwei is about a billionth of 1 Ethereum. Hence, this transaction fee translates to about 50 cents.
Gas charges in Ethereum have been reducing for the past few days. In fact, for the past week, the mainchain transactions have been affordable for investors.
Four days ago, Arcane Research reported that Ethereum gas fees were at a six-month low of $15, with some transactions going to $2.51. A few days later, the most priority transactions within the Ethereum mainchain cost about 50 cents. This reducing trend could indicate the low fees lasting for long.
Lower Network Congestion Credited for The Low Fees
Some experts have been crediting lower Ethereum mainchain alternatives for the diminishing fees. However, the consensus is that lower network congestion/lower volume is the direct cause of the diminishing fees.
One of the factors whose impact is already being seen is the Layer 2s. Layer two solutions are intended to solve the scalability, speed and cost problems. While they offered transactions at affordable prices and gave alternatives, gas on Ethereums mainchain remained high.
However, the current low ETH gases could indicate that L2s are finally paying off. Recent reports indicate that the mainchain costs are lower than the layer 2s.
Alternative blockchain options like BSC and Terra need to also get credits for Ethereum lowering gas. Such blockchains give developers alternatives for building and running smart contracts at favorable gases. Multiple projects moved from Ethereum to BSC and others.
Another factor leading to lower gas fee reduction could be the reduced number of NFT minting. NFT minting networks have been taking immense resources hence leading to rising gases. Of course, such projects increase the congestions within the network leading to higher fees.
There is also a possibility that the fee burning mechanism was introduced in mid-2021 using the London hardfork. Not all fees go to miners. Instead, some of it is removed from circulation.
A New Dawn for Ethereum?
The recent drop in gas could indicate new dawn in the Ethereum chain. Ethereum has been making plans to reduce gas for a while. The beacon chain was supposed to achieve that. While the permanent move to Ethereum 2.0 is not yet activated, the recent events show that further gas reduction is possible.
