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Ethereum gas fees remain low while network turns inflationary

Ethereum gas fees remain low while network turns inflationary

GrafaGrafa2024/09/02 05:35
By:Liezl Gambe

Ethereum’s (CRYPTO:ETH) onchain transaction fees have recently dropped to notably low levels, while the network’s issuance rate has turned inflationary. 

According to recent data, the average cost of an Ethereum transaction over the weekend was just 0.00029 ETH, or $0.743. 

Even high-priority transactions are inexpensive, with fees around 0.972 gwei, equivalent to less than $1, as reported by Etherscan. 

At the same time, data from ultrasound.money shows Ethereum’s issuance rate is currently inflationary at 0.734% per year. 

Metrics from bitinfocharts.com reveal a steady decline in Ethereum’s transaction fees over the past 90 days, with only minor fluctuations. 

On August 8, the average transaction fee was $2.452. However, it has since dropped to under $1. 

The median fee also shows a decline from $0.786 in early August to 0.000079 ETH, or $0.198 per transaction, currently. 

These figures illustrate that the cost of conducting transactions on the Ethereum blockchain is now more affordable than it has been in recent months. 

Etherscan's gas tracker provides further insight, indicating that current Ethereum transfer fees range from 0.763 to 0.972 gwei, translating to just $0.05 to $0.06 per transaction. 

High-priority operations, such as swapping coins, now cost around $0.95. 

Selling a non-fungible token (NFT) incurs a fee of about $1.60, while bridging between networks costs approximately $0.31. 

These lower fees reflect the impact of the Ethereum Dencun upgrade, which reduced transaction fees up to fourfold and subsequently decreased the amount of ETH being burned. 

This shift toward an inflationary state is influenced by changes in network dynamics. 

The rise of layer two (L2) solutions has reduced congestion on Ethereum’s mainnet, resulting in fewer transactions and lower fee burning. 

As L2 solutions continue to grow, the network must balance scalability with maintaining its deflationary economic model. 

Ethereum’s current inflationary status highlights the challenges and trade-offs faced in achieving this balance.

At the time of reporting, the Ethereum price was $2,449.27.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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