Trading on ethereum hasn’t been this cheap with the average transaction fee hitting $15.31 and the median tx fee hitting $6.67. Ethereum fees were this low in mid-September 2021 when the average transaction fee on ethereum cost more than $15 per transaction.
Analysts highlight that the fees today are about 71.15% lower than the $52.46 average transaction fee which was recorded on January 10, 2022. The average gas fee on ethereum remains 552% higher than the average transaction fee on the bitcoin network. The BTC network is $2.30 per onchain transfer.
The crypto asset is deflationary because of the implementation, on August 5, 2021, of the Ethereum Improvement Proposal (EIP)-1559. This is also called the Ethereum London upgrade. Since August 2021, about two million ethereum, valued at about USD6.6 billion, has been burned. Besides onchain ethereum network transfers being cheaper, the layer-two network fees are less costly as well.
Fees matter because it is of critical importance to the sustainability of ethereum. Moreover, users who make transactions compete in the binding process to have the operations processed more quickly. Analysts say that the more fees one pays to the miners, the faster the confirmation time to the transaction. Ethereum is a Turning-complete blockchain as it can run decentralized applications with complex operations.
Analysts also highlight that the higher the complexity, the more mining power is required to run the transaction. Thus, it’s normal to have fees of hundreds of dollars for a complex token swap. This is where the new Ethereum Consensus Layer (formerly called ETH2.0) comes in to ease the burden. It seeks to be proof-of-stake and introduce scalability solutions.