Transaction fees on the Ethereum blockchain have fallen to their lowest levels since 2020, currently averaging around $0.168 per transaction.
Transaction fees on the Ethereum blockchain have fallen to their lowest levels since 2020, currently averaging around $0.168 per transaction. This decline is attributed to a significant decrease in user activity, with fewer individuals sending Ether and engaging with smart contracts, according to on-chain analytics platform Santiment.
Brian Quinlivan, the marketing director at Santiment, noted that when user activity increases, transaction fees tend to rise as users bid higher amounts for expedited confirmations. Conversely, the current lull in transactions has led to a decrease in the need for such bidding, resulting in lower average fees.
The recent drop in fees coincides with broader market challenges. Following the announcement of sweeping tariffs by U.S. President Trump on April 2, traditional and crypto markets experienced downturns. Over the past 14 days, Ethereum's value has fallen by more than 12.5%, lingering just below $1,600.
Amid this backdrop, traders appear to be exercising caution, waiting for global economic uncertainties to stabilize before increasing their transaction frequency with Ether and altcoins. Quinlivan observed a heightened sensitivity among retail investors towards Ethereum discussions and economic news, as the asset nears critical support levels.
Looking ahead, the Pectra upgrade for the Ethereum network is scheduled to launch on May 7. This upgrade aims to double the layer-2 blob capacity, reduce transaction fees, and allow fees to be paid in stablecoins like USDC and DAI. Additionally, the maximum staking limit will increase from 32 ETH to 2,048 ETH.
The Pectra upgrade follows the Dencun upgrade in March 2024, which had already reduced transaction fees for layer-2 networks and improved the economic landscape for Ethereum rollups.
The second phase of Pectra is anticipated in late 2025 or early 2026, introducing enhancements aimed at improving scalability and data storage efficiency.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
