- Ethereum’s gas fee was below $2 at the time of writing.
- Ethereum L2s now have a TVL of over $9 billion.
The exorbitant cost of Ethereum [ETH] gas fees have become synonymous with the identity of the network. Yet a recent development has led to a welcome drop in these expenses.
Read Ethereum’s [ETH] Price Forecast 2023-24
Ethereum gas fee drops
Sanitation recently shared an insightful update that revealed a notable drop in gas costs. The accompanying chart vividly captured the fluctuating nature of these fees, illustrating a rise to over $7 around July 5, followed by a subsequent decline.
Before this peak in July, an even bigger surge occurred in May, with gas costs skyrocketing to nearly $14 — an all-time high for the network in the current year.
Additionally, in the past 24 hours, most of the fees were attributed primarily to packaged ETH (WETH) and native ETH transactions. These two forms of Ethereum tokens accounted for the bulk of the fees generated on the network during this period.
Source: Sentiment
At the time of writing, the gas price had dropped around $1.93, providing significant relief to Ethereum users. It’s worth noting that this year’s lowest gas price happened in February, falling to about $1.7.
A downturn in transactions?
According to data from Defillama, transactions on the Ethereum network have consistently maintained a steady pace and have not experienced any noticeable decline since its inception. Although occasional peaks have been shown on the chart, the total transaction volume was within the normal range.
At the time of writing, the network had an impressive 1 million transactions.
A possible reason for the drop in Ethereum’s gas price
The congestion of the Ethereum network and the resulting high gas prices have spurred the development of alternative Layer 2 (L2) solutions. These solutions aim to ease the strain on the Ethereum mainnet, reducing costs associated with congestion.
According to data from L2 hits, L2s have gained a lot of traction in terms of user adoption and Total Value Locked (TVL). At the time of writing, L2s TVL stood at an impressive $9.51 billion, with Arbitrum and Optimism as the market leaders.
The emergence of additional L2 solutions suggests the potential for lower gas costs on the Ethereum network and faster transaction processing soon.
Realistic or not, here is the market cap of ETH in terms of BTC
Trend of ETH
At the time of writing, ETH has suffered a setback in its attempt to cross the $1,900 price threshold. While it briefly surpassed this level in the previous trading period, it experienced a slight drop in value during the press trading period.
The trading price hovered around $1,860, reflecting a loss of less than 1%. On the Relative Strength Index (RSI), ETH was at the neutral line, indicating a weak bullish trend.
Source: TradingView