According to Etherscan information, on June 23, the weighted average gas price was 2 Gwei, which is 10x less than a year ago and 40x less than the peak values of March 2024. What's going on?
Indeed, fees on the Ethereum network have dropped significantly. Here are the main contributing factors:
1. Projects such as Arbitrum, Optimism, Base and zkSync help relieve the Ethereum main network by bundling multiple transactions into batches and processing them on separate networks.
2. Conducted on March 13, 2024, the Dencun upgrade significantly reduced transaction fees in L2 networks. For example, at Optimism the average fee dropped from $1.4 to $0.04.
3. Dencun introduced a new type of transaction using BLOB, which reduced the cost of processing and storing information.
4. Overall decline in speculative excitement, especially in the NFT space, has also helped reduce the network load.
5. Vitalik Buterin and the Ethereum team have been working on solutions to reduce transaction costs for several years.
The sharp decline in fees also has a downside as it led to a decrease in the amount of ETH "burned", thus making Ethereum an inflationary asset with a 0.45% annual increase in the supply of coins.