Ethereum

Ethereum Fees Have Not Been This Cheap Since October of 2021

Cryptocurrency fans may celebrate the entry of their favorite tokens into the mainstream audience thanks to the impact of the Crypto-Bowl. Still, Ethereum lovers have one more reason to rejoice, as trading ETH hasn’t been this cheap in months.

This phenomenon extends to L2 solutions as well, with almost all of the most popular infraestructures hittting less than $1 on average to send ETH and between $0.31 and $2.18 to swap tokens —a more complex operation— according to L2Fees data.

Using Ethereum Is Getting Cheaper

Ethereum is a kind of Swiss-Army blockchain. Big dApps, decentralized exchanges, smart contracts for enterprise applications, altcoins, shitcoins, stablecoins, NFTs, and countless other innovative products run on this network.

But everything comes at a price, and all this popularity has driven Ethereum’s fees through the roof, complicating adoption prospects in the near term and giving rise to a multitude of competing blockchains and scalability projects,

But things appear to be changing. According to figures from Bitinfocharts, the average transaction fee on the Ethereum blockchain has hit $15.31, a figure not seen since October 2021, when fees touched a low of about $13.

Average Ethereum Fees. Image: Bitinfocharts
Average Ethereum Fees. Image: Bitinfocharts

This represents a decrease of more than 75% in the average fee price since November of 2021, when transactions reached costs of more than $62.8 on average.

The median transfer fee reached $6.67, a metric that gives a breath of fresh air to the average ETH user who just want to make a simple payment or transaction.

Why Fees Matter

The fee issue is of critical importance to the sustainability of Ethereum (and any blockchain for that matter). On Ethereum and on all other proof-of-work blockchains, users who make transactions compete in a kind of bidding process to have their operations processed more quickly.

Simply put, the more fees you pay to miners, the faster the confirmation time of your transaction. However, unlike Bitcoin, Ethereum is not just used to transfer wealth but is a Turing-complete blockchain, meaning it can run decentralized applications with complex operations.

But the higher the complexity, the more mining power is required for the transaction to run. Because of this, it is normal to have fees of several hundred dollars for a complex token swap, especially on quick trades where a few seconds determine the difference between a profit or a loss  —such as legitimate arbitration or exploiting bugs for more questionable purposes.

The ultimate solution to ease the burden is the new Ethereum Consensus Layer, formerly known as ETH2.0, which seeks to be proof-of-stake and introduce scalability solutions such as sharding, potentially raising transaction processing capacity close to 100,000 transactions per second, according to Vitalik Buterin’s estimates.

But the road is long, and many are skeptical. In the meantime, the best options are to use L2 solutions like Polygon or Loopring – where sending tokens costs less than $1 – or turn to competing blockchains like BSC or Solana.


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