Ethereum's Historically Low Gas Fees: A Sign of Scalability?

Despite the burgeoning blockchain activity on the Ethereum network, gas fees on the world's leading smart contract platform remain near their historic lows. This trend suggests a more mature and scalable infrastructure, primed for the deployment of advanced real-world applications.

Ethereum transaction fees have touched a historic low of just 0.16 gwei, translating to approximately $0.01 per transaction. According to blockchain data aggregator Milkroad, gas fees were slightly elevated for token swaps at $0.15 and for Non-Fungible Token (NFT) sales at $0.27.

These remarkably low costs stand in stark contrast to prior periods characterized by heightened network activity, where surging demand frequently caused fees to skyrocket. Such volatility in gas fees has been a persistent criticism of Ethereum in past cycles.

Increased Ethereum Activity Amid Stable Fees

Daily transactions on the Ethereum network have surged to 1.6 million, reaching a near one-month high, previously observed at the beginning of October before the record-breaking $19 billion liquidation event. Crypto intelligence platform Nansen reports that active addresses have also risen to similar levels, peaking at a monthly high of 695,872 on Saturday.

Ethereum's record-low gas fees are a direct consequence of the Dencun and Pectra upgrades, both engineered to curtail transaction costs and amplify throughput. The Pectra upgrade, deployed in May, doubled the blob capacity of Layer-2 (L2) networks, leading to a reduction in transaction fees on L2s by roughly 50%. This upgrade also facilitated the offloading of more transactions from the mainnet, further reducing costs.

Furthermore, the Dencun upgrade, a prior major advancement for Ethereum, has successfully lowered L2 transaction fees and diverted more transactions from Layer-1 (L1). A year after its deployment on March 13, 2024, average Ethereum transaction fees are 95% cheaper, as reported by Cointelegraph.