The average Gas Fee of Ethereum today has dropped to only $1.12 per network transaction, with a minimum of 5 Gwei. Compared to the previous bull market, the on-chain interaction of the Ethereum network is indeed quiet now, not only due to the decrease in demand caused by price correction but also possibly due to the Restaking trend.
In this bull market, the Ethereum ecosystem seems to be less favored. Data on the 28th shows that the average transaction fee of Ethereum has dropped to only $1.12 per network transaction, with a minimum of 5 Gwei, reaching the lowest daily average cost since October 18th of last year. In the previous bull market, driven by the DeFi and NFT markets, the average transaction fee often reached 100-200 Gwei. Nowadays, such low transaction costs also make investors doubt whether this is really a bull market…
The minimum average transaction cost is 5 Gwei. Decrease in demand due to price correction?
According to analysis by market information platform Santiment, in the cryptocurrency market, investors’ emotions often fluctuate dramatically between “skyrocketing” and “worthless,” and this psychological change can be observed through the fluctuation of transaction fees. Typically, when the Ethereum price is relatively high, transaction fees peak, while during price lows, they fall back to basic levels.
Therefore, in the past six weeks, the cryptocurrency market has mainly experienced a correction trend, reducing demand and relieving network congestion, resulting in an instant drop in transaction fees. Santiment pointed out that this decrease in demand may help Ethereum and related altcoins achieve price reversal faster than expected. The lack of demand means thinner transaction pressure on the chain, and they believe this may be a precursor to an upcoming market rebound.
Restaking trend: Earning interest by holding
In the past cryptocurrency market, especially in the NFT and DeFi fields, active trading was the norm. Investors often need to interact with smart contracts to perform various operations such as trading, lending, minting, or other complex contract interactions. This high-frequency interaction not only increases transaction volume but also drives up transaction fees because every contract execution consumes network resources.
Nowadays, with the rise of the Restaking trend, the total value locked (TVL) in the Ethereum re-staking protocol EigenLayer has surpassed $16 billion today. A large amount of funds in the market is locked in this low-frequency, high-efficiency investment activity, leading to a decrease in overall transaction demand and no additional operations required for a long period of time. Data shows that out of the current total supply of 122 million ETH, approximately 26% is staked on the Beacon Chain. Therefore, all of the above factors contribute to the decrease in transaction fees.
With Ethereum’s transaction fees reaching a relatively low point, it has actually become an excellent opportunity for users to carry out various operations on the chain. This includes participating in airdrops, nurturing boutique accounts, and other on-chain interaction activities. The low-cost transaction environment provides an opportunity for investors to enter investments and trades at a lower threshold.
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