Ethereum’s Daily Transaction Fees Hits 8-Month Low
Ethereum, the largest programmable blockchain and parent platform of ETH, has experienced the lowest daily fees in eight months, with total fees dropping to 1,719 ETH on Sunday. This is 89% lower than the year-to-date high of 16,720 ETH on May 5.
Ethereum uses a proof-of-stake consensus mechanism with validators instead of miners to create and verify transactions. Validators, who stake at least 32 ETH, receive transaction fees but not in full. They receive a priority fee or tip to prioritize their transactions, while the base fee is burned, removing ETH from circulation. A decline in total fees indicates low network usage, as fees are determined by network activity, mainly pending transactions. The eight-month low in fees likely stems from Ethereum’s increasing popularity on layer 2 scaling solutions, a long-term positive development.
Friend.tech, launched on August 1, gained over 100,000 users and over $25 million in revenue in just two weeks. Layer 2 scaling solutions like Optimism, Arbitrum, and Base help Ethereum scale, alleviating congestion and reducing transaction costs. IntoTheBlock’s data shows daily transactions on Optimism Mainnet reached a new all-time high of nearly 900,000 on August 15. Transactions between Ethereum mainnet and major layer 2s using optimistic rollup technology reached their second-largest value in history. As competition between L2s increases, Ethereum benefits.
(With inputs from Shikha Singh)
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