Cryptocurrency fees have been on the rise lately, as networks become congested and more people use them. But one cryptocurrency is bucking the trend – Ethereum. Fees for sending the network’s primary token Ether (ETH) have dropped dramatically in recent months, thanks to the rise in popularity of layer twos (L2), secondary frameworks built atop of existing blockchains.
As of this writing, even high-priority transactions on the Ethereum network now require only 10 gwei per gas unit, approximately 50 cents in total. One gwei equals one billionth of an ETH. Currently, there are over a million daily transactions paying only 50 cents in-network costs.
The gas fee adjustment is certainly a positive development considering only last May fees on the Ethereum network topped $70 per transfer. The 50 cents charge also represents the lowest since the London upgrade, which saw ETH’s average gas fees skyrocket to $59 per transaction, as well as the lowest since Jan. 10 with network fees hitting $52 per transaction.
As mentioned, one of the reasons for the drastic reduction in-network costs to only $0.50 per transfer could be the growth and adoption of layer twos. In fact, more than 2.2 million ETH worth $6 billion have already transacted on Arbitrum, the Ethereum second layer rollup and other L2s. Another reason is the increase in gas limit from 15 million to 30 million per block. This doubling that has enhanced the network’s scalability while decreasing prices, began in August last year.
However, and as coincu’s analysis points out, the main reason for the gas fee reduction is that “there aren’t as many farming airdrops or NFT mintings cluttering up the network.”
NFT mintings and farming airdrops can really clutter up the network, making it difficult to process transactions. This is especially true when people are minting multiple NFTs or farming airdrops from different contracts.
Developers need to find a modifying way to limit the number of NFTs that can be minted or farmed in a given day, and to make sure that people are only farming airdrops from contracts they actually own. Otherwise, we’re just going to end up with spiking transaction fees and a clogged-up network that doesn’t work for anyone.
At last check, ETH was trading at $2,774, up more than 3 percent from the previous day.