Ethereum, the largest altcoin, underwent the highly anticipated Merge that saw it transition into a Proof-of-Stake (PoS) consensus. Well, the mechanism has changed, but ETH continues to give mixed signals to traders.

Two sides of the same coin

Despite being one of the most prominent blockchains, Ethereum’s biggest drawback has been its extremely high transaction fees. Consider this: The Ethereum network charged an average gas fee of about $40 per month between January 2021 and May 2022, with May 1, 2022 seeing the highest average daily gas price of $196,638.

But these scenarios seem to be in jeopardy especially now after the Merger. Ethereum transactions have reportedly become a lot cheaper. According to data from The Block, on September 22, Ethereum’s transaction costs were at their lowest point in the past two years.

Source: IntotheBlock

The Ethereum network’s average gas fee has dropped to 0.0011 ETH ($1.5). Aside from Merge, there may be other reasons for the drop in gas rates.

It could be the broader market decline – crypto markets witnessed a major crash over the past two months, causing crypto prices to plummet. ETH was trading at around $1.2k at the time of writing. Ergo, fall with more than half of its peak.

Another reason for the fall in gas tariffs could be a major liquidation, especially in the NFT domain. Interest in speculative NFT buying fell significantly on Ethereum. Consider a story about the largest NFT marketplace, OpenSea.

OpenSea contributed to much of the total gas consumption, but has fallen significantly since January. It consumed 230,000 ETH or about 16,400 ETH month-on-month (MoM). But in the past 30 days, this MoM has decreased significantly.

Source: ITB

At press time, it was well below the MoM average at around 1,100 ETH.

Greener pasture

On the other hand, ETH’s stats saw an interesting story, thanks to growth in L2s, Arbitrum and Optimism.

In fact, the number of active addresses on the Ethereum network has increased by 60% on the same platform. Ethereum’s layer two (L2) scaling solutions – mainly those based on optimistic rollups – became more popular.

Source: ITB

While it is true that Ethereum’s transaction costs hit new lows, the number of transactions on these L2 blockchains soared.

This post Ethereum’s Transaction Fee Sets New Record, L2s Can’t Keep Calm

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