Ethereal rivals can no longer use the network’s high transaction fees against it, as data from on-chain data provider Santiment has revealed what ETH gas fees have been reduced by 90% since November 2021.
The average gas rate on the network is now $5.81. This is well below the average rate of $69.57 on May 11, 2021 or November 8, 2021, when it averaged $62.85.
What has led to reduced gas rates
Generally, the fall in the value of Ethereum means that the gas fee, which is calculated in Gwei, also falls. While Ethereum has fallen significantly from its all-time high, it has rallied in recent weeks, breaching the $3,000 mark again.
Another factor responsible for the drop in gas rates is the reduced interestt in DeFi and non-fungible tokens. Despite other networks taking some of its market shares, Ethereum is still the number one smart contract network. But interest in both spaces has dropped significantly in recent months.
NFT transactions, which have been responsible for the majority of Ethereum activity in recent months, I have dropped. After reaching a monthly ATH trading volume of around $5 billion in January, the space posted a trading volume of $2.5 billion in March.
This means there are fewer transactions in the space, and therefore less need for buyers to pay high fees to miners to get their transactions approved immediately.
Also, with Ethereum closer to fusion when fully converted to a proof-of-stake consensus network, network proposals such as the EIP-1559 recording mechanism have helped to dramatically reduce fees.
Bitcoin fees are also low
Not only are Ethereum gas fees low; that of Bitcoin it is also at record low levels. According to Alex Thorn, the fall 2021 bull run was the first that was not accompanied by an increase in transaction fees.
#bitcoin rates are at historic lows. the craziest thing? The fall of 2021 was the first bull run that was not accompanied by a major increase in fees.
How is that possible? What does that mean? here is a thread explaining the most confusing (and amazing) graph in bitcoin. (remember June 2021) pic.twitter.com/gnWssTckX2
— Alex Thorn (@intangiblecoins) April 5, 2022
When calculated in Satoshis per byte, Bitcoin transaction fees are at their lowest point. Even in dollars, this is the lowest since spring 2020.
Thorn explains that the main reason for this is that the blocks have not been filled since June 2021. This makes the last nine months the first period in which Bitcoin blocks have not been filled. But the failure to fill the blocks is not exactly due to less activity. It is mainly due to segwit and user behavior.
Obtain a Edge in the Cryptomarket 👇
Become a member of CryptoSlate Edge and get access to our exclusive Discord community, plus exclusive content and analysis.
Join now for $19/month Explore all the benefits
This post Bitcoin and Ethereum transaction fees are falling
was published first on https://cryptoslate.com/bitcoin-and-ethereum-transaction-fees-are-dropping/