Ethereal Network transaction volumes have begun to skyrocket, bringing with it an increase in their relative gas prices. On-chain analytics company data glass node indicates that rates have more than tripled since the end of 2022.
Over the past nine months, Ethereum transactions have cost an average of 10 to 20 gwei. However, due to large transaction volumes, this figure has now risen to 38 gwei. According to Glassnode, “The incremental nature of gas demand suggests an early resurgence in grid activity may be underway.”
Ethereum gas fees typically rise and fall based on demand from the network. Therefore, as more users try to add a transaction in the next block, the fees/cost will increase.
NFT trading activity has helped drive up Ethereum gas fees
Unlike previous spikes in Ethereum gas fees, the new figures are not the result of new wallets joining the Ethereum ecosystem. The data shows that the number of new addresses generated on the network is still 40% below what it was a year ago. Thus, it indicates that existing merchants are the driving force behind the recent increase in transaction volumes.
Specifically, a new push from Blur with its various incentives to attract users, as well as Yuga Labs’ release of a highly engaging and rewarding Dookey Dash game, have stimulated collectors. Also, featured collections announcing the release of new projects like Doodles 2 have played a key role.
glassnode notes, “The recent attention surrounding Blur has led to an increase in demand for block space, resulting in higher fees for validators and more ETH burned through EIP1559.”
Blur’s rise to the top is proving controversial, as Doodle CEO Julian Holguin points out. Competition between the two leading NFT markets has restricted the cash available for many NFT projects that have relied on secondary royalties for income.
That being said, NFT transactions on Ethereum have increased by 97% for the past two consecutive months. They are approaching the levels last seen during the NFT boom from mid-2021 to mid-2022.
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*All investment/financial opinions expressed by NFT Plazas come from the personal research and experience of our site moderators and are intended for educational purposes only. People are required to fully research any product before making any type of investment.
Basil is an avid fan of blockchain technology and all its innovations, and he is passionate about sharing this narrative with his audience. He has spent over five years in the crypto space, specializing in research and creating Web3 content for various media outlets around the world.
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