Ethereum Gas Fees Goes Up After the London Hardfork Months Ago
Ethereum’s London Hard Fork update, which went live on August 5, is said to be the most significant change to the world’s second most valuable cryptocurrency so far. Folks expected the update to reduce gas fees or transaction fees on the Ethereum network. However, Statista data shows otherwise.
What is Happening to ETH Gas Fees?
When Ethereum launched the fork in August 2021, the gas fees for the month averaged at 136.21. Currently, the gas fees stand at 158.62, showing an increase of about 16.17%.
The blockchain has faced its shares of struggles with scalability issues. It also has highly unpredictable and occasionally excessive transaction fees that can irritate even its most ardent supporters.
The problem has gotten worse in recent months due to a boom in interest in nonfungible tokens, which are predominantly constructed on the Ethereum blockchain, exponential development in the field of decentralized finance, or DeFi, which is also primarily based on the Ethereum blockchain.
Since the implementation of EIP1559, popularly known as the “London Hard Fork,” ETH gas costs have risen. It is in addition to a fresh leg higher in the value of ETH. Notably, the increase in value is because ETH is being burned with each transaction, making it more scarce. Gas prices rise as the number of transactions increases. Because of the increased volume of transactions, miners must first prioritize which transactions are preserved on the blockchain. This is determined by the transaction charge, with the more significant the fee, the sooner it is picked up.
The issue is that many of the blocks have reached their maximum capacity. There is barely enough space to save transactions. Hence, increase the cost of gas. As a result, transaction and gas prices have risen to such levels that users may no longer transfer modest amounts of ETH without incurring excessive charges. Money is effectively locked in place on the Ethereum blockchain, driving increasing its value.
More Fairness in the Ethereum Network
After a large mining pool removed profitable front-running of decentralized exchanges, the Ethereum network now has its lowest Maximum Extractable Value (MEV) in six months.
MEV revenues supplied to Ethereum miners have lately decreased to approximately $172,000 per day, according to Delphi Digital’s newsletter. The amount significantly reduced from levels that frequently topped $1 million last year.
MEV, also known as Miner Extracted Value, extracts information from regular user transactions before processing. Ethereum miners increase revenues by focusing on transactions with the highest fees and employing MEV strategies such as trading bots.
MEV is commonly referred to as Ethereum’s “invisible tax.” Hence, less MEV might be interpreted as better network fairness. It is still an unresolved bug in the coding of Ethereum and other Turing-complete blockchains.
Ethereum Price is Plummeting
ETH failed to break beyond $3,200 this week and is now trading at $2,974.30, a 4.90 percent decline from yesterday. Despite the current drop, the cryptocurrency has had a spectacular week, with a 0.24 percent price rise in the last seven days.
The primary question is whether ETH can stay over $3,000. If it does, bulls may be in a position to make another attempt at the $3,200 barrier in the next week. However, if they fail, the cryptocurrency might collapse below the next support level at $2,800, causing it to lose a significant psychological threshold ($3,000).
The signs continue to be positive in the near term, giving reason to be confident. Buyers must defend the $3,000 mark. Otherwise, sellers might gain control of the market movement in the following week.
