Ethereum has the lowest fees in almost 1 year

Ethereum has the lowest fees in almost 1 year
Key facts:
  • The suggested fee on Ethereum is $0.98 as of press time.

  • The definitive solution for the high commissions would be in second layers and lateral networks.

Ethereum has a reputation of being an expensive and always congested network, with a somewhat unpleasant user experience, at least in layer 1. But, occasionally, this changes and there are oases of low fees. That is the current state of the network.

According to what can be seen in different statistical portals, Ethereum fees are currently at July 2021 levels, almost a year ago.

CriptoNoticias was also able to verify this on its own. When trying to make an ether (ETH) transaction, the wallet suggests using a commission of USD 0.98. For what the network has used to its users, it is a cheap amount.

The commissions in Ethereum, as this medium has reported on several occasions, they can reach several tens of dollars when the network becomes congested. The “DeFi-mania” of 2020, the 2021 non-fungible token (NFT) frenzy, and the massive rise of gaming play-to-earn In that same year, there were some events that collapsed the network, with the consequent increase in its operating cost.

In 2022, commissions were paid over USD 100. This happened at the beginning of May, with the land sales for the Bored Ape metaverse.

Fees on Ethereum hit levels as low as they were in July 2021. Source: Screenshot/ Bitinfocharts.

Why are commissions on Ethereum going down?

From what has been said above, it can be inferred that one of the causes of the drop in commissions in the network co-created by Vitalik Buterin is the decrease in operations in decentralized applications (or dApps, as they are known in the English-speaking world).

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Both NFT trading, activity on decentralized finance (DeFi) platforms and games to win cryptocurrencies are going through a lull. The bear market of bitcoin (BTC) splashes the entire industry and the numbers prove it.

chart shows decline in nft trading volume on ethereum
Just like Ethereum fees, also NFT traded volumes are at 2021 levels. Source: translated screenshot/ TheBlockCrypto.

It can also be thought of as a reason for the drop in commissions, the fact that many users of dApps on Ethereum migrated to other networks. BNB Smart Chain (previously called Binance Smart Chain), Solana, Polygon and Avalanche, are some of the blockchains that have cornered part of the market. These networks, although more centralized and with less security than Ethereum, offer the possibility of operating with lower commissions.

What solution will Ethereum give to the problem of commissions?

Every Ethereum user should keep in mind that this period of low fees is probably just an “oasis in the middle of a desert”. When a new “blockchain fad” emerges, the network will become congested againwith unwanted and costly consequences.

As a solution to this problem, the Ethereum developer team points to emphasize the use of second layers. Among them are the rollupstools that “wrap” several transactions and execute them outside the main network, in order to avoid having to pay commissions to the miners for each one of them.

In this way, the aim is to decongest the main network, which would be reserved only for operating with large amounts, or when an operation is to be definitively established in the block chain.