According to recent reports, Ethereum gas prices have reached a low that users haven’t seen for over two years. Last week, buyers on the Ethereum network reported paying as little as 50 cents in gas fees. Currently, the leading cause is due to the current downtrend in ETH trading volume. Yet further examination has shown multiple vital factors affecting the current state of the market, with NFTs and ‘the rise of Layer2’ being among them.
Gas Fee Factors
Last year, Eth reached an all-time high price of $4,891. Mainly due to an oversaturation of network traffic driven by the latest NFT craze. At this time, the overall crypto market has seen mass liquidation. With many buyers moving to risk-off positions due to the current bear market. Recent data from DappRadar shows a tremendous decrease in trading volume on the top Ethereum marketplaces. 9 out of 10 have seen a steady decline in trading volume in the past month, such as Rarible (80%) & OpenSea (34.7).
Experts are also giving credit to the recent rise of alt-chains such as BSC & Terra for the networks declining gas fees. With increased scalability inside BSC and others, multiple projects have switched from Ethereum to various alt-chains.
Currently, users are awaiting the merging of the network to a Proof of stake method allowing for cheaper transactions. In addition, recent upgrades to the network, such as the latest ‘hard fork’, have provided new avenues such as ETH burning. The current release for Ethereum’s proof of stake model is set for 2023. Yet, setbacks in the Web3 industry are all too common. However, some modifications to the network might happen sooner than some planned. So far, with recent history, we can expect to see delays forming around the corner. As for now, we’ll enjoy the Gwei savings.