Ethereum gas fees hit the lowest point in seven months amid intensifying layer 2 competition. This decline in average transaction fees is attributed to the increasing popularity of layer-2 networks for more frequent transfers.
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Ethereum Gas Fees
Transactional fees on the Ethereum network recently dropped to a seven-month low, hitting $1.7 per transaction on May 12th. Data from BitInfoCharts shows that Ethereum’s average transaction fee fell to $1.7, a level last seen in October 2023 when the price of ETH was below $2,000. The decrease in average transaction fees is credited to the growing use of layer-2 networks for more frequent transactions.
https://bitinfocharts.com/comparison/ethereum-transactionfees.html#3y
The implementation of Ethereum’s London upgrade also contributed to lower fees on top layer 2 networks, making them more appealing for everyday transactions. According to L2Fees statistics, token swap operations on major layer-2 networks are now less than $0.5, a significant difference from Ethereum’s mainnet where users would pay over $4 to swap tokens.
Limitations of the current System
In response to the limitations of the current fee system, Ethereum co-founder Vitalik Buterin has proposed a multidimensional gas pricing model. He argues that the current single-metric gas model leads to inefficient use of computing power and could result in unsafe blocks being added to the blockchain.
By transitioning to a multidimensional gas model, Buterin believes the network’s true constraints and capabilities can be better reflected, potentially increasing capacity without compromising resource fungibility.
Conclusion
To conclude, Ethereum gas fees have reached a seven-month low, dropping to $1.7 per transaction, thanks to the rising popularity of layer-2 networks. The implementation of Ethereum’s London upgrade has further reduced fees on these networks, making them more attractive for daily transactions. Vitalik Buterin’s proposal for a multidimensional gas pricing model could address current limitations, potentially enhancing the network’s capacity without compromising resource fungibility.
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