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The ethereum ecosystem is experiencing a historic drop in gas fees, which is affecting both mainnet and layer 2 transactions.
According Etherscan Gas TrackerThe average gas fee on the mainnet sits at 4 Gwei at the time of writing, roughly $0.21 USD. However, transactions can be processed for as little as 3 Gwei, or around $0.14 USD.
This decrease extends to the blockchain network’s layer 2 solutions, including Optimism, Base, Arbitrum, and Linea, whose fees are less than $0.01 per Gasfees.io. data.
Market observers said the decline in fees is mainly due to the increased use of Layer 2 scaling solutions and the adoption of blob transactions introduced with the Dencun hard fork in March; the upgrade has contributed to lowering transaction costs on Layer 2 networks and has significantly impacted the network.
Effect of the drop in eth gas fees
As a result of lower fees, less eth is burned, making the network inflationary.
In the past 24 hours, less than 200 eth was burned, leading to the ethereum supply becoming inflationary with a growth rate of 0.67%, according to data from ultrasound.moneyOver 60,000 eth has been added to the network in the last 30 days.
OKX Ventures noted that this continues a trend seen in Q2 when a 66.7% drop in the burn rate impacted the balance between eth supply and demand. x.com/OKX_Ventures/status/1815018844433592657″>aggregate:
“As network activity slows and burns decrease, managing ethereum’s supply and inflation will be crucial.”
ethereum ETF
Meanwhile, analysts have pointed out that the recent launch of ethereum exchange-traded funds (ETFs) adds more complexity to the ethereum ecosystem.
Last week, the SEC approved eight new ethereum spot ETFs, including Grayscale's ETHE conversion fund, for trading on U.S. exchanges.
These products saw inflows exceeding $1 billion during their first four days of trading, although this was offset by an outflow of approximately $1.5 billion of ETHE from Grayscale.
However, cryptocurrency analyst Koffi believes these trends show the network is in a “good place.” x.com/0xKofi/status/1816418029825040718?t=Lguq90NBvrGro-TdxM_ZGg&s=19″>wrote:
“The ethereum ecosystem is affordable for end users and there are new capital flows into the system. I think we are in a good position.”
