In recent days, Ethereum gas fees have fallen to single-digit values not seen since 2020. Users are paying as little as 1 gwei for ETH transactions.
Drop in Ethereum Gas Fees
Ethereum gas fees have hit lows not witnessed since 2020. According to data from Etherscan, on August 10th, users paid 1 gwei, or $0.007, to send ETH, marking the lowest recorded fee in about four years. On August 11th, the fees doubled to 2 gwei. Since the Berlin hard fork in 2021, the gas fees have not fallen below 10 gwei for more than 20 days.
Increased Activity on Ethereum L2s
Analysts point to increased activity on Ethereum L2s. Data from L2Beat shows that total value locked (TVL) in L2 solutions surged 300% in less than a year, from $12 billion to $37 billion. Arbitrum One leads with a TVL of $15.32 billion, commanding a market share of 40.90%. Coinbase’s Base ranks second with a TVL of $6.38 billion and a market share of 17.03%.
Decrease in ETH Burning Rate
In the Ethereum network, lower gas fees have led to a significant decrease in the ETH burning rate. According to Ultrasound.money, the current burning rate is 0.16 ETH/min, with 225 ETH burned in the last 24 hours and 2,357 new ETH introduced to the network. CoinMarketCap reports that the price of Ethereum is $2,727 with a circulating supply of 120,274,778 ETH.
Experts predict that the current low gas fees will not last long. The lower fees are attributed to reduced network activity and the migration of transactions to L2 solutions.
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