Ethereum transaction fees drop dramatically – here’s the reason

CRYPTO_NEWS ETH

Once notorious for charging high fees for processing transactions, the Ethereum [ETH] blockchain became unexpectedly cheap to use in recent days.

 

Ethereum becomes super affordable

 

As per on-chain analytics firm Santiment, the gas fees plunged to levels not seen in nearly a year. The average cost of settling transactions over the week was just $1.13, a massive drawdown from the peaks attained earlier in May.

L2 networks playing their part

 

The marked decline in transaction fees was majorly driven by the increased adoption of layer-2 scaling solutions. Blockspace demand for L2s hit the roof in 2023 with users flocking to capitalize on its relative cost and efficiency advantages.

 

According to L2Beat, transaction activity on scaling solutions witnessed a metaphoric rise in 2023. In fact, the average transactions per second (TPS) on L2s was 5.78 times more than Ethereum over the last week.

In essence, L2s were delivering on what they were originally intended to do – relieve Ethereum from the on-chain transaction load and assist in its scaling.

 

Santiment noted that lower gas fess could boost Ethereum network’s utility, attracting more decentralized applications and smart contracts. In turn, it could exert upward pressure on ETH coin in the days to come.

However, there has been no appreciable change in ETH’s value of late. The coin had been range bound over the last week, according to CoinMarketCap, exchanging hands at $1,635 as of press time.

 

ETH’s liquid supply plummets further

 

The indifference could be attributed to the continuing flight of ETH holdings out of centralized crypto exchanges. According to Santiment, 4 October saw the largest outflows in over six weeks, with over 110,00 ETH tokens exiting the liquid supply.

 

With the latest departure, ETH’s liquid supply tanked to 10.6 million, its lowest in five and a half years. On the other hand, ETH supply in self-custody surged to its all-time high of 115.8 million. This equated to 96% of all ETH coins in circulation at the time of writing.

 

Meanwhile, investors continued to be bullish on ETH’s long-term prospects as reflected by the positive weighted sentiment for the asset.

 

Source : AMBCrypto by Aniket Verma / October 06, 2023

rayn.finance logo

Automata FRANCE SAS

240 rue Evariste Galois,

06410 Biot,

Sophia Antipolis

Automata Pay

65-66 Warwick House 4th

Floor, Queen Street, London

England, EC4R 1EB

Automata Pay Europe Ltd

3rd Floor Ormond Building,

31-36 Ormond Quay Upper,

Dublin 7, D07 Ee37

Automata ICO Ltd

Italian Branch

Via Archimede, 161,

00197 Roma

Italy

The purchase of digital assets is subject to a high market risk and price volatility. Changes in value can be significant and occur rapidly and without warning. Past performance is not a reliable indicator of future performance. The value of an investment and returns can fluctuate both up and down, and you may not recover the amount you invested. RISK WARNING

Automata ICO Limited has a branch in Italy with its registered office at Via Archimede, 161, Roma, Italy, and registered in Italy under number 96550860587 with the Organismo Agenti e Mediatori (OAM) as a Virtual Asset Service Provider (VASP).

Automata France SAS is a company registered in France with the company number 902 498 617. Automata FRANCE SAS is registered with the french Financial Market Authority, l’Autorité des marchés financiers (“AMF”), as a provider of Virtual Asset Service Provider under number E2023-087.

Automata Pay Europe Limited is a partner of Modulr Finance B.V., a company registered in the Netherlands with company number 81852401, which is authorised and regulated by the Dutch Central Bank (DNB) as an Electronic Money Institution (Firm Reference Number: R182870) for the issuance of electronic money and payment services. Your account and related payment services are provided by Modulr Finance B.V. Your funds will be held in one or more segregated accounts and safeguarded in line with the Financial Supervision Act.