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Ethereum's gas prices have fallen to a 5-year low, with median fees dropping to 1.9 gwei, highlighting the growing influence of layer-2 solutions.
Ethereum Median Gas Fees Hit 5-Year Low
As interest in layer-2 networks grows, the median cost to transmit a transaction on the Ethereum blockchain has fallen to its lowest point in five years, with low-priority transactions falling to roughly 1 gwei or even lower.
Dune Analytics data shows that on August 10th, Ethereum's median gas fees dropped to 1.9 gwei. From its March year-to-date high of 83.1 gwei, it has fallen by about 98%, reaching its lowest point since the middle of 2019.
One gwei, or around seven cents, was the price for low-priority Ethereum transactions transmitted in the last ten minutes, according to statistics from Etherscan's gas charge tracking system for August 12.
Per Cointelegraph, one of the nine Ethereum Improvement Proposals (EIPs) that went live as part of the Dencun upgrade in March was to include data blobs, also known as proto-danksharding, with the goal of reducing transaction costs for layer-2 blockchains.
Layer-2 Networks Drive Ethereum Cost Reductions
Despite continuing to rely on the L1 to validate transactions, the Ethereum ecosystem has staked its future on layer-2 blockchains, which can process more transactions at lower cost by separating them from the original Ethereum network.
Gnosis co-founder Martin Köppelmann wrote on X on August 10 about the recent drop in gas fees, saying, "Ethereum needs to get more L1 activity again."
Köppelmann voiced his worry about the necessity of gas fees of 23.9 gwei to finance staking incentives, which are payments made to individuals who assist in validating blockchain transactions.
Furthermore, he stated:
Compared to the base blockchain, which saw over 109 million transactions in the last 30 days, Ethereum's layer-2 activity was 33 million, according to L2Beat data.
Ethereum Transactions Surge on Layer-2 Networks
Over the past 30 days, a total of 97 million transactions were processed by Layer 2's Artbitrum and Taiko.
Data from Ultra Sound Money shows that the supply of Ether has increased by roughly 13,400 ETH, or $34.1 million, in the last seven days, despite its decreased usage in transactions and payouts to stakers.
