If the problem of too high fees has often been mentioned, the Ethereum network is this time singled out for abnormally low transaction fees. And we will see that this is not necessarily good news for the network.
Less than $3 for the purchase of an NFT on the Ethereum blockchain!
Now is the right time if you want to buy NFT through the Ethereum network! Midday Sunday, the median fee per NFT transaction dipped below the $3 mark. A level at its lowest for more than 10 months.
On May 28, the average cost per validated transaction was $0.69, according to data from the Ycharts platform. The average cost per transaction was over $3 in mid-April, to put these numbers into perspective. For many observers, the trend seems to continue to anchor down.
Lower transaction fees: is this good news?
First of all, it is important to understand how gas fees work on the Ethereum network. During each transaction made by the network, these fees can be assimilated into taxes paid to the miners of the network who come to validate the transactions. When the network is saturated, transaction fees also increase.
For network users as well as NFT fans, the drop in transaction fees seems like good news. However, the picture is not so rosy. This is because the drop in transaction fees results from less usage of the Ethereum network by users. And therefore, the decline in interest in blockchain, as suggested by the economic intelligence firm Santiment.
“Ethereum fees are so low these days. One might even notice that they were this low before the previous lows. Low fees reflect the fact that there is little activity on the network.”
In addition, gas fees are expressed in Gwei, the equivalent of Satoshi for Bitcoin on the Ethereum network. Consequently, the gas costs converted into dollars are functions of the Ethereum price. And despite the jump at the start of the week, the trend has been down for several dozen days. Recall that since its ATH was recorded last November, the ETH token has lost nearly 60% of its value.
Many interpret the reluctance on the network as the expectation that “The Merge” arouses. Indeed, both users and investors are all impatiently awaiting the merger and the transition from Proof of Work to Proof of Stake . A paradigm shift that should be accompanied by a considerable reduction in the carbon impact of the Ethereum blockchain, but also a lasting reduction in transaction costs.