Key Points
- Ethereum’s transaction fees have significantly dropped to their lowest point since October 2023.
- Layer 2 solutions (L2s) are seeing a decrease in fees and an increase in user numbers.
Ethereum, known for its high transaction fees, has seen a significant reduction in its average fee.
This has led to questions about whether the volume of transactions on the platform has decreased or if Layer 2 solutions are absorbing these fees.
Ethereum Fees at a Low
Data from Santiment showed a decrease in Ethereum fees over the past few weeks.
As of April 28th, the average fees on the network had dropped to around $1.28, the lowest point since October 2023.
At the time of writing, the average fee had further decreased to around $1.02.
There has also been a reduction in the amount of Ethereum fees burned.
The burnt fee has dropped to its lowest level in months, around $355,000.
In contrast, in March, the average fee was over $15, with burnt fees totaling over $35 million.
Decline in Network Transactions
The recent Ethereum upgrade has led to a decrease in fees on Layer 2 solutions (L2s), resulting in an increase in transaction volume.
User numbers on L2s have grown over the past few months, surpassing 4 million users.
However, data from Grow the Pie shows that the number of active addresses across major L2s is below 2 million.
There has also been a decline in transaction count, which was around 6.3 million.
An assessment of fees on L2 platforms showed a significant decrease over the last 30 days, with total fees amounting to less than $1 million.
This suggests that despite the growing number of users, the decrease in active users and fees indicates a reduction in transactions.
The overall decline could lead to an increase once the price of Ethereum starts to rise.
Ethereum’s price has remained within the $3,000 range in recent days.
It briefly touched the $4,000 mark in March but has since retreated from that level.
The end of the previous week saw a significant uptick, with a 3.93% increase pushing its price to around $3,253.
On April 28th, the increase was less pronounced, hovering around 1% and trading at approximately $3,262.
However, as of the current writing, it has experienced a decline of over 2%, trading at around $3,180.
Given the observed trend in fees, traders may anticipate a forthcoming price increase for Ethereum.
