The Ethereum fees drop a six-month low but the drop is likely related to the cooling-off on the NFT market so let’s read furhter in today’s latest Ethereum news.
Ethereum fees drop to a six-month low, nearing the levels of August 2021 as measured in both ETH and dollar terms. The NFT mania contributed to an increase in transactions costs in late 2021 and it seems that adjectives such as high and expensive have been related to Ethereum transaction costs but according to the reprots from Arcane Research, declining could be a better term for now.
In the most recent report, Arcane pulled CoinMetrics data to show that the seven-day average for the fees is at their lowest rate since August of last year. They have been heading down since the second week of January:
“If you have been waiting for lower fees before swapping tokens or minting NFTs, now might be a good time.”
This is not to say that things are getting cheaper for the average consumer. Arcane pegged the cost of the token swap at $15 but it is still below $200. The drop-in fees coincided with a fall in crypto asset prices with the exchange value of ETH declining near 12% in the past week and almost 15% in the past month. As ETH becomes worthless, the fees are becoming cheaper. A closer look at the data shows that the transaction fees, as denominated in ETH are also at a six-month low point and the points to reduce the demands on the network via some combination of the droping interest or increased reliability solutions like sidechains and rollups.
The rival networks like Avalanche and Solana already started eating away the ETH market share by offering similar services like NFTs, decentralized finance, and games with lower fees and faster speeds. However, neither are they likely to answer to what users need. The scaling solution use remained fairly steady while there’s no clear evidence that other layer-1s are the reason for the drop in transaction prices.
The continued downswing could be further evidence of a lull in interest in NFT with the blockchain contracts tied to real-world assets. The NFTs which often come in the form of digital art or collectible originated on the ETH network and caught fire a year ago. The popularity translated into the increased traffic on the network whcih managed the supply and the demand by calculating all the computing costs for the transactions, token swap, and auction bids that will be passed alogn to the user in the form of a fee.
Ethereum has been working on a long-term fix that will make the network more scalable with other plans to the transaction to a PoS network between April and June and once it does, it will move ahead with creating shared chains which will allow most of the transactiosn to happen once the congestion is eased.
