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 activity of the Ethereum network is indeed quiet now, apart from the decrease in demand caused by price retracement. The Restaking trend may be the biggest reason.
In the current bull market, the Ethereum ecosystem seems to be less favored. Today’s data 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. Now, such low transaction costs have made investors doubt if this is really a bull market…
The minimum average transaction cost is 5 Gwei. Has the demand decreased due to price retracement?
According to market intelligence platform Santiment’s analysis, in the cryptocurrency market, investors’ sentiment often fluctuates dramatically between “skyrocketing” and “worthless”, and this psychological change can be observed through the fluctuation of transaction fees. Usually, when Ethereum is at a relatively high price point, transaction fees peak, and when it is at a low point, fees fall to a basic level.
Therefore, in the past six weeks, the cryptocurrency market has mainly experienced a retracement trend, reducing demand and relieving network load, resulting in instant drop in transaction fees. Santiment pointed out that this decrease in demand may help Ethereum and related altcoins achieve price reversal faster than investors expected. The lack of demand means that the on-chain transaction pressure is relatively low, and they believe that this may be a precursor to a market rebound.
Restaking becomes a trend of earning interest by holding
In the past cryptocurrency market, especially in the NFT and DeFi sectors, active trading was the norm. Investors often needed to interact with smart contracts to perform various operations such as trading, borrowing, minting, or other complex contract interactions. This high-frequency interaction not only increased transaction volume but also pushed up transaction fees because each contract execution required network resources.
Now, with the rise of the Restaking trend, Ethereum’s re-staking protocol EigenLayer TVL has surpassed $16 billion today. A large amount of capital is locked in this low-frequency and high-efficiency investment activity, resulting in a decrease in overall transaction demand and no need for additional operations for a long period of time. According to data, out of the total supply of approximately 122 million ETH, about 26% is staked on the Beacon chain. Therefore, taking all the factors mentioned above into consideration, this has become another major factor contributing 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 engage in various operations on the chain. This includes participating in airdrops, nurturing premium accounts, and other on-chain interactive activities. The low-cost transaction environment provides an opportunity for investors to invest and trade with a lower entry threshold.
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