Ethereum fees drop to a 5-year low as transaction volumes lull 📉
Transaction fees on the Ethereum network have plummeted to their lowest in five years, reaching around $0.168 per transaction. This decrease corresponds with a lull in activity on the blockchain. Fewer interactions with Ether and smart contracts have led to reduced demand, impacting the costs of transactions.
Santiment's Brian Quinlivan explains this phenomenon as a supply and demand system. When fewer people transact, the necessary fee bids decrease. Although low fees might deter immediate price rebounds, traders are patiently waiting for broader economic stability.
Amidst these changes, the Pectra upgrade is scheduled for May 7, aiming to double layer-2 capacity and reduce fees further. This upgrade follows the Dencun enhancement that occurred in March 2024, and it's set to eventually increase Ethereum's staking limit and efficiency.
This news arrives alongside Ethereum's recent 12.5% price drop, indicating market volatility despite imminent technological improvements.
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