On June 30, the Ethereum network Recorded their lowest rates since 2016. According to data provided by Etherscan, the average gas rate currently sits at just 3 Gwei ($0.14), according to data provided by Dune Analytics.
On June 30, the Ethereum network Recorded their lowest rates since 2016. According to data provided by Etherscan, the average gas rate currently sits 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.
Alex DovbnyaDuring the 2021 bull rally, Ethereum gas fees were exorbitantly high due to high demand in the NFT (non-fungible) sector. This led some experts to argue that the network was unsustainable and gave rise to more affordable alternatives like Solana.
This time around, Ethereum gas fees are reaching extremely low levels even though the network is also experiencing strong transaction activity. In fact, the volume of the leading altcoin is at the same level as at the beginning of the year.
The drop in rates can be explained by A higher level of efficiency from the Layer 1 market due to the combination of Layer 2 volume and the introduction of “blob transactions” with EIP-4844 that helped significantly boost Ethereum’s scalability.
“We will continue to see gas spikes above 15 gwei during times of increased activity. The thing is that the gas market has generally been more efficient after 4844. Therefore, we will have more affordable days than expensive ones,” Brian Smocovich, founder of Pistachio Fi saying in a publication on the social network X.
Back to inflation
The massive drop in fees means that Ethereum is no longer a deflationary network, as the amount of fees to burn is very small. This goes against those who were pushing the “ultra-sound money” narrative before the Dencun update.
Mushumir’s buttIn the past seven days, 14,393 ETH were added to the network, according to data provided by ultrasound.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.
