Transaction fees, otherwise known as gas fees in the cryptocurrency space on the Ethereum (ETH) blockchain have dropped to the lowest levels since August. However, they are still not cheap.
According to data from CoinMetrics, the seven-day moving average cost of an Ethereum transaction as of March 9 totalled $11.14, placing it back amongst the levels recorded mid-last year before it surged dramatically to as high as $55 at the tail end of 2021.
Gas fee prices surged after staying in this range for about 3 months with experts attributing the spike to a rise in interest in the Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi) platforms on the Ethereum network, which suggest that the interest on these two ecosystems may be declining.
What you should know
- At the time of writing there appears to be minimal network congestion, with Etherscan data estimating gas fees to cost around 22 Gwei ($0.00005181) for a low-speed confirmation to 24 Gwei ($0.00005652) for a high-speed confirmation.
- Ycharts data also shows that the average gas price of Ether has been dropping rapidly since the start of the year, plunging all the way from 218 Gwei on Jan.10 to 22 Gwei as of the time of this writing. This shows a perfect correlation between the gas fees and market performance as the cryptocurrency market has lost over 23% in market capitalization since the start of the year, indicating that lower participation is one of the reasons for the market decline seen.
- Amid the booming growth of Ethereum’s non-fungible token (NFT) and decentralized finance (DeFi) sectors in 2021, the network has come under fire on multiple occasions for its outrageously expensive gas fees. Lower congestion and lower fees also appear correlated with the declining interest in NFTs and DeFi during the start of this year compared to late 2021.
In terms of the last 30 days, DappRadar data shows that 9 out the 10 top marketplaces on Ethereum have seen decreased trading volume, with first-placed LooksRare and second-placed OpenSea both shedding 78.27% and 34.75% respectively. Other notable losses include SuperRare and Rarible with 73.29% and 80.65% each respectively.
Ethereum-based DeFi too is also suffering too, with eight out of the top 10 projects in all-seeing red over the past month in terms of total value locked (TVL) and native asset token price.
Ether currently trades $2,592.07 as of the time of this writing.