In a significant development for the Ethereum network, average transaction fees have seen a sharp decline. This drop comes shortly after the Ethereum network posted a significant fee hike in May, pushing it to a year-long high.
according to the latest data From popular market intelligence platform Santiment, Ethereum fees have now settled somewhere below $5 from the yearly high of over $10 per ETH transaction in early May. It is worth noting that this latest update marks a positive change for Ethereum users and the broader ecosystem.
Back to normal: Ethereum fees regain stability
On the last day of May, data from Santiment revealed that Ethereum fees have gone down by about 69% from its yearly high of $14 per ETH transaction in early May. The data shows that ETH fees have now settled at $4.28 per transaction in the past few hours.
In particular, rising Ethereum fees during the meme coin frenzy, fueled by the popularity of the frog-themed meme coin Pepe (PEPE) token, had initially led to inflated transaction costs for cryptocurrencies. ethereum users.
However, recent data highlights a welcome reversal of this trend, with rates plummeting to more reasonable levels. The 69% decline in transaction fees over a period of just 25 days indicates a positive outlook for Ethereum network adoption and user engagement.
According to the Santiment team, the decrease in fees is a promising sign that Ethereum is becoming more affordable for users, which encourages more utility and activity within the network.
Lower transaction costs not only attract new users, but also incentivize existing participants to take full advantage of Ethereum’s capabilities.
As fees normalize, it paves the way for better accessibility, making Ethereum a more considerable platform for various applications, including decentralized finance (DeFi), non-fungible tokens (NFTs), and more.
ETH self-custody and supply trend
Another notable trend accompanying the fee cut is the decreasing percentage of the Ethereum supply being held on crypto exchanges. Recent data also from Santiment reveals that the supply of Ethereum on exchanges has reached an all-time low of 10.31%.
This decline is a result of the growing preference for self-custody solutions among Ethereum holders due to security concerns related to centralized exchanges. Furthermore, regulatory uncertainties surrounding the classification of ETH as a security or commodity have contributed to this change.
For context, self-custody refers to the practice of keeping one’s own assets in secure wallets and personal accounts rather than relying on third-party exchanges. ETH’s rise in self-custody indicates a growing level of trust among holders and a desire to maintain control over their digital assets.
This development aligns with the spirit of decentralization and further strengthens Ethereum’s position as a trusted and secure platform for value transfer and smart contracts.
The combination of lower transaction fees and increased self-custody underscores Ethereum’s growing maturity and resilience as a blockchain network. These developments not only build trust among existing users, but also attract new entrants to join the Ethereum ecosystem.
Meanwhile, ETH has not shown any notable rises in recent weeks, aside from a 4.3% rise in the last 7 days. The second crypto asset by market capitalization rose almost 5% last week. And in the last 24 hours, ETH has experienced a 0.4% loss in value.
At the time of writing, Ethereum is currently trading at $1,860 as its trading volume has also plummeted from nearly $8 billion last Thursday to $6.4 billion in the last 24 hours.
Featured Image from Shutterstock, Chart from TradingView
