Who would have guessed Ethereum gas fees would ever be cheap again? Sometimes the past week, gas fees have been as low as just 10 gwei per gas unit even for high-priority transactions. As one gwei is one-billionth of an eth, this means a transaction on Ethereum (ETH) mainchain can be as affordable as 50 cents in total.
To find equivalent price levels, one has to go back to July 2020. This is the first time in nearly two years when using the Ethereum network’s layer-1 chain costs users so little. Last May, in contrast, fees reached as much as $70 per transaction. On May 19th 2021, an all-time-high gas fee was printed at over 659 gwei on average. That’s almost 66 times as much as the 10 gwei seen recently.
Transactions still in high demand
Yet, network demand remains relatively high with more than one million transactions a day. This number has not fallen as much as the gas fess, in fact, the number of transactions stays relatively level over time.
As CryproSlate reported last week, transaction fees on Ethereum have dropped from as high as $200 to as low as $15 within the last six months. According to Arcane Research, cited in the article, the main reason behind the recent drop in Ethereum gas fees is the lower trading volume, and perhaps lower interests, in non-fungible tokens or NFTs.
In previous times, NFT transfers accounted for most of the transactions occurring on the Ethereum blockchain. But the sudden drop in the level of interest last month has led to a massive decline in the demand for the use of Ethereum.
To understand the relationship between the drop in Ethereum’s gas fees decline and NFTs, one only has to look at how the trading volume on OpenSea declined from $247 million to $124 million from February 1 to February 6, during which the median gas fee also fell from 134 gwei to 65 gwei.
The NFT market seems to have slowed down since the top in the last week of January. According to market data from Nonfungible.com the number of sales is down from near 64,000 sales per day in mid-January to almost 24,000 in mid-February. Sales in dollar terms are down from $160 million on the 31st of January to $75 million in mid-February.
Another reason behind the falling gas fees might be the rise of layer-2 networks and sidechains such as Polygon (MATIC), Optimism and Arbitrum. These layer-2 networks are growing in popularity with 2.23 million ETH transacting on Arbitrum and other L2s.
In addition, as all fees no longer go to miners, it may be that the fee burning mechanism set in motion with EIP-1559 reduces network spam, especially from miners but also other actors.
All in all, these low levels of Ethereum gas fees means the second-largest blockchain by market cap is cheaper to use than the Polygon sidechain. To be fair, Polygon is deliberately adding 30 gwei to all transactions to mitigate spam transactions, but as long as this policy remains, Ethereum’s gas fees are comparable to Polygon’s fees, and sometimes even lower.
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Based on recorded gas fees, the Polygon network generally has faster and cheaper transactions than Ethereum. The transaction costs on Polygon are around 0.1-0.5 MATIC, while that on Ethereum is around $2.5-$20 or equivalent ETH.
1. Affordability: Ecrox blockchain boasts some of the lowest gas fees in the industry, making it an attractive option for users looking to optimize their transaction costs. 2.
Ethereum Average Gas Price is at a current level of 13.71, up from 9.913 yesterday and down from 48.45 one year ago. This is a change of 38.29% from yesterday and -71.70% from one year ago.
Ethereum operates on a proof-of-work (PoW) consensus algorithm. Polygon uses a Proof of Stake (PoS) consensus algorithm. Limited scalability leads to higher transaction fees and slower confirmation times during network congestion.
Polygon is a scaling solution (or sidechain) that runs parallel to the Ethereum blockchain. This means Polygon is fully compatible with Ethereum, but enables transactions to be conducted at a fraction of the cost, thanks to its network of low-traffic sidechains.
So, how does Polygon make this cheaper? To cut gas costs, scaling solutions like Polygon process transactions on side chains. Polygon has the potential to handle up to 65,000 transactions per second, whereas Ethereum can process only up to roughly 17 transactions per second.
To reduce Ethereum gas fees, choose off-peak hours for transactions, batch similar transactions, use gas tokens and estimation tools, and explore Layer 2 solutions like Optimism. Whether you're an avid DeFi user, a DApp developer, or simply a casual Ethereum enthusiast, high gas fees are equally frustrating for us all.
Ethereum gas prices vary a lot, even from one hour to another. Statistically, it's been shown that the lowest gas prices can be found in the mornings and on the weekends.
The uptick in transaction volume over the past weeks has caused a spike in Ethereum network gas fees. The seven-day moving average of this metric has increased to a multi-month high of over $11. This is an elevated level not seen since mid-December 2023, according to The Block's Data Dashboard.
Ethereum Average Transaction Fee is at a current level of 0.0003, up from 0.0002 yesterday and down from 0.0008 one year ago. This is a change of 50.00% from yesterday and -62.50% from one year ago.
Polygon can validate transactions quicker than Ethereum; handling up to 700 transactions per second compared to Ethereum's average of 10. It charges much lower gas fees as a result; around $0.01 per trade compared to the average fee of $14 on Ethereum for a trade on Uniswap v3 in 2022.
The million-dollar question is whether Polygon retains Ethereum's exceptional security, decentralization, or smart contract functionalities. Well, Polygon design compromised on security, the extent by which some Ethereum-based apps run on it, and other limitations bog it down.
Enter Polygon, which is a “Layer 2” scaling solution (or “sidechain”) that's emerged to provide faster transactions and lower costs for users. It acts as a speedy parallel blockchain running alongside the main Ethereum blockchain.
Polygon is much cheaper than Ethereum. The reason behind this is the calculation of gas fees, as Ethereum is calculated in ETH and Polygon is calculated in MATIC. So even transferring 1 unit of local currency on Ethereum with a low transaction cost of 7 Gwei can reach $0.62.
Polygon Gas Fees Surge 13,250%: What's Behind This Incredible Spike? Polygon's fees surged by 13,250% to 4,005 gwei with daily transactions hitting over 6 million, marking a yearly high.
Gas fees are an essential component of interacting with the Ethereum and Polygon networks. This article aims to clarify why users are required to pay these fees, how they are calculated, and how to estimate them using wallets like Magic Eden Wallet.
What are gas prices on Polygon PoS? Gas prices on Polygon PoS are the fees that users pay to have their transactions processed on the network. Gas prices are denominated in gwei, which is a unit of measurement equal to 0.000000001 MATIC.
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