Posted on

Ethereum Fees Touch Monthly Lows As Transaction Volumes Plummet

Ethereum fees had touched new highs thanks to the popularity of the decentralized finance (DeFi) space. As network activity had grown, so had the transaction volumes. The effects continue to linger even into the bear market, although fluctuations between low and high are now more common in the space. Presently, transaction volumes have fallen sharply and ETH fees have now plummeted to monthly lows.

Ethereum Transactions At $0.5

Ethereum transaction fees have declined to one of their lowest points this year. Gas costs which have been fluctuating between high and low seem to have found their resting place at lower prices. In the early hours of Monday, the gas costs for the Ethereum network had declined to their lowest point for June. It sat at only 19.8 Gwei per transaction at the time of this writing, which converted to about $0.5 per transaction on the network. 

Related Reading | Bitcoin May Not Reclaim All-Time High For Another Two Years, Binance CEO

This translates to a more than 80% drawdown from the peak of the gas costs last week at 151.3 Gwei per transaction. This coincides with a decline in transaction volume on the network, as shown on Messari.

The data aggregation website shows that Ethereum’s transaction volume is down more than 80% from its monthly high. On the 13 of June, transaction volumes on the network had sat at more than $10 billion in real volume. Today, the real volume was sitting at $570 million, the lowest it has been for the month.

ETH price declines to $1,179 | Source: ETHUSD on TradingView.com

Supply has also taken a hit in the month of June. By the end of last month, there was more than 8.6% of all total ETH supply in DeFi. However, as of the time of this writing, there is less than 8.3% of the circulating supply in DeFi. This also translates to a dollar value of under $10 billion when three weeks ago, the value was at $30 billion.

ETH Profitability Tanks

With the recovery in the price of Ethereum has come some good tidings for investors. But, there is still a gap in the profitability levels from last year compared to this year. Going into the last month of the year in 2021, more than 80% of ETH investors had been swimming in profit. Given that the digital asset had hit a new all-time high in November, this was expected.

However, there is a significant drawdown from this point. Data from IntoTheBlock shows that while the majority of ETH investors remain in profit, it is only by a small margin. 52% of wallets are currently in the green while 47% are in loss. This puts only 2% of all investors in the neutral territory, which remains shaky.

Related Reading | Bitcoin Perpetual Open Interest Suggests Short Squeeze Led To Crash

When it comes to the growth of the network, there is more negative sentiment among investors. The major reason for this is all of the competitors that are moving into the DeFi and NFT space. Solana especially has been giving Ethereum a run for its money in the NFT game, triggering an exodus towards the network which offers faster transactions and lower fees.

Nevertheless, Ethereum remains the second-largest cryptocurrency by market cap. Currently trading at $1,200 at the time of this writing, the cryptocurrency boasts a market cap of $149 billion.

Featured image from CryptoSlate, chart from TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Posted on

Ethereum Gas Fees Hit 8-Month Lows As Price Continues To Struggle

Ethereum gas fee had run-up to some of the highest levels back in 2021. Mostly, this was caused by the growth of the decentralized finance (DeFi) and non-fungible tokens (NFTs) space that saw activity on the network spike significantly. This had continued for the better part of the year but as the market has ushered in the new year, activity on the network has begun to stabilize, seeing Ethereum fees drop.

Ethereum Fees Drop To Eight-Month Low

Ethereum fees have been steadily dropping for the last couple of months. Some of this has to do with the recent bear trend that has seen momentum drop across the crypto market. Additionally, activity has begun to balance out on the network as more competitors have popped up, so the strain on the network leading to higher fees last year has been lessened.

Related Reading | Price Analysis: Where’s XRP Headed After Ripple’s Big Win

At its height, Ethereum fees had spiked as high as $300 per transaction back in May of 2021. This was when the bull run was in full bloom. After this, it had subsided, crashing back down to the $30 per transaction fee territory. However, with the bull rallies that followed and increased activity on the network, this number had spiked again, this time, only reaching the $200 level.

After this, the downtrend had been consistent. In January, the increase in transaction fees would prove to be short-lived as what followed was a decline in fees. Two months later, Ethereum transaction fees have dropped to the lowest they have been in eight months, now sitting at $35.17.

ETH On The Charts

Ethereum is another recovery trend at the time of this writing, although this trend is quite weak and does not look like it will last long. The digital asset continues to struggle to leave the $2,500, a level which it seems bears have trapped it in. Keeping Ethereum at this level guarantees that it does not move above the 50-day MA, which can be disastrous for the value of the asset.

ETH recovers above $2,600 | Source: ETHUSD on TradingView.com

Additionally, ETH looks to be mounting support at this price level. It needs to break above $2,600 to establish itself on the current recovery trend but with selling pressures mounting on investors, the digital asset is looking towards another hard day of trading.

Related Reading | Where Ethereum and Bitcoin Headed After Musk’s Tweet

At the time of this writing, ETH is trending upwards and has broken above the $2,580 point. It peaked at $2,594 in the early hours of Tuesday but is yet to retest the $2,600 resistance point.

Featured image from CoinDesk, chart from TradingView.com

Posted on

Vitalik Buterin On How To Eliminate Ethereum Network Congestion And High Fees

Network congestion on the Ethereum network is a very real and present issue, which has in turn brought about more real and pressing issues. Users of the network, especially small-time investors, have drawn the short end of the stick with these issues as they are the most affected. With fees skyrocketing, carrying out small transactions on the leading smart contracts network is becoming less and less feasible with each passing day.

The high fees and congestion have sparked discussions on how it can be eliminated. There are various developments in the pipeline, like the Consensus Layer (formerly known as ETH 2.0) and other suggestions made by developers. This time around, it is atheneum’s founder Vitalik Buterin, proposing a way to deal with the network congestion, and by extension, the high fees, on the network.

Blob-Carrying Transactions On Ethereum

In a conversation that was posted to popular social media platform Twitter, Vitalik Buterin and developer Tim Beiko put forward proposals that would help address the issue of high network congestion. With the adoption of the network growing at a rate not even anticipated by the creators themselves, it has now become a race to find the best way to properly scale the network. Here is where Buterin proposes a new feature called “blob-carrying transactions.”

Related Reading | Solana And Ethereum Recover After Registering Double-Digit Gains

This feature would be added to a hard fork that would take place in the near future, explains Buterin. Blob-carrying transactions would allow for higher scalability for rollups in the meantime before the complete move to the consensus layer. It is basically a stopgap until sharing is implemented on the network. This new feature would be connected to both the Beacon block and the consensus nodes that are coming to the network.

Some proposals to add "blob-carrying transactions" in a near-future hard fork, bringing higher scalability to rollups before full sharding is complete. https://t.co/oRTSwAC1oD

— vitalik.eth (@VitalikButerin) February 5, 2022

“This EIP provides a stop-gap solution until that point by implementing the transaction format that would be used in sharding, but not actually sharding those transactions,” the founder said. “Instead, they would simply be part of the beacon block and would need to be downloaded by all consensus nodes (but can be deleted after only a relatively short delay).”

When Is This Coming?

The blob-carrying transactions could possibly be deployed with the Shangai hard fork. It would provide a solution to mempool issues that continue to rock the network. Additionally, a solution for blob transactions and normal transactions that carry a large amount of data would be to “increase the minimum increment for mempool replacement from 1.1x to 2x, decreasing the number of resubmissions an attacker can do at any given fee level by ~7x,” the notes read.

ETH settles above $3,000 | Source: ETHUSD on TradingView.com

Ethereum still remains the network with some of the highest fees in the space. It is reported that fees can go as high as $300 in some cases when the network is clogged due to a high-profile NFT minting. Even the Layer 2 rollups that have been developed to help users deal with the high transaction fees have seen their own fees steadily increase as they are unable to accommodate demand.

Related Reading | TA: Ethereum Smashes Heavy Resistance: Next Bullish Levels Traders Should Watch

On the price side, Ethereum is doing well as it continues to follow closely the price of bitcoin. Both digital assets went into the weekend with bearish prospects and emerged on a bull trend, seeing ETH’s price breaking above $3,000 once again.

Featured image from Nairametrics, chart from TradingView.com

Posted on

Ethereum Fee Averages Remain Above $30 Despite 35% Drop. Price Pump Incoming?

Ethereum fees remain high as the network continues to see some of the highest traffic in the industry. Daily transaction volumes put Ethereum in the billions per day and all of these transactions carry a higher than average fee. This fee structure which has caused concern among users seems to not be going anywhere, but there looks to be a light at the end of the tunnel.

Recently, the average transaction fee for Ethereum transactions has dropped significantly. In the past week, the average transaction fee for ETH transactions topped 35% in total, but it still remains on the high side compared to other blockchains.

Ethereum Fees Are Down

Data from BitInfoCharts shows that Ethereum fees are down over the past week. It correlates to a 35% drop in fee rates, however, the blockchain remains one of the highest in terms of fees. Leading up to last week, transaction fees were averaging around $50 per transaction. With the recent decrease, this number has now dropped to $35 on average per transaction.

Related Reading | Solo Ethereum Miner Hits The Jackpot With 170 ETH For Mining A Block

This is expected given the amount of activity the blockchain houses but it is still on the high side. According to this report, Ethereum users are paying about $40 million in fees daily, whereas rival Cardano only sees about $87K spend in fees on an average despite recording almost identical transaction volumes as ethereum.

ETH trading at $3,257 | Source: ETHUSD on TradingView.com

The median gas fee for the network sits at about 0.0047 ETH or $14.78 for each transfer, considerably higher compared to other leading blockchains in the space. ETH miners are also getting some of the highest miner rewards, ahead of bitcoin miners. This fee structure is a pain point that is expected to be addressed in the move to ETH 2.0 in the coming year.

ETH Getting Ready For A Pump?

The decrease in transaction prices could spell good news for the digital asset. With transaction fees tumbling, it would allow for faster transactions. Also, with transaction fees down, it most likely means that more investors are opting to hold on to their digital assets rather than deciding to move them around, which could point to consolidation and accumulation on the part of these investors.

Related Reading | American Rapper Lil Baby On Holding Bitcoin And Ethereum Over Fiat

With less ETH moving around on the network and onto exchanges for sale, then supply on exchanges are down during this time. Usually, notable recovery periods are preceded by periods of stretched out accumulation, where investors choose to pile on to their current holdings.

This, in addition to the fact that the price of the digital asset has been dropping for a while and is primed for a correction, ethereum may be getting ready for a bounce-back towards $3,500.

Chart from TradingView.com