Ethereum's average transaction fees are reaching record lows as activity increasingly migrates to the on-chain Layer 2 (L2) network.
According to Ultrasound.money data, the average gas has dropped to 4.81 gwei. This is the lowest level since the network completed his 2022 merge event.
Market observers attribute this decrease to increased activity on the L2 network after the completion of the Dencun upgrade. The Dencun upgrade has significantly reduced L2 network charges, making transactions at the base layer less attractive.
Of particular note is the blockchain analytics platform IntoTheBlock report:
“We are now seeing an increasing number of transactions being settled on Ethereum Layer 2. Last month, the three largest L2s achieved a record 82% of the transaction share of all transactions on Ethereum.”
Additionally, the number of transactions on Arbitrum has increased significantly; 2 million transactions daily On May 8th, the number of visitors increased significantly from an average of 1 million people in early March.
Additionally, L2beats data shows that Base and Arbitrum executed an average of 30 and 20 transactions per second, while Ethereum managed 13 transactions per second over the same period.
ETH turns into inflation
Meanwhile, CryptoQuant's analysis revealed that ETH entered an inflationary state after the Dencun upgrade, resulting in a decrease in gas fees and a slowdown in burn rate.
In light of this development, the company stated the following:
“Since the merge, Ethereum appears to be on track to live up to its ‘ultra-healthy’ money narrative, with the total supply of ETH showing a slight decline. However, the post-Dencun upgrade challenges this by reducing transaction fees and his ETH burn rate, leading to an increase in supply. ”
CryptoQuant further notes that Dencun's upgrade environment presents a scenario where maintaining deflation will require a significant increase in network activity, in contrast to the current trend of lower gas prices and lower burn rates. He explained in detail.
In particular, UltraSound.Money data shows that the daily amount of ETH spent in the past day was 519 ETH, a record low for the network.
