The average transaction fee on the Ethereum network has hit a new low as more activity shifts to Layer-2 (L2) networks within the blockchain. Data from Ultrasound.money indicates that the average gas fee has dropped to 4.81 Gwei, the lowest level seen since the network’s Merge event in 2022.
Observers in the market attribute this decline to the increasing usage of L2 networks following the completion of the Dencun upgrade. This upgrade substantially decreased fees for L2 networks, making transactions on the base layer less appealing.
According to analytics platform IntoTheBlock, an increasing number of transactions are now being settled on Ethereum Layer 2s. In fact, the three largest L2s collectively accounted for a record 82% of all Ethereum transactions last month.
Additionally, the number of transactions on Arbitrum has experienced significant growth, surpassing 2 million daily transactions on May 8. This is a notable increase from the average of 1 million daily transactions back in early March.
Data from L2beats also reveals that Base and Arbitrum have averaged 30 and 20 transactions per second, respectively, while Ethereum has only managed 13 transactions per second during the same time frame.
In other news, analysis from CryptoQuant shows that ETH has now become inflationary post the Dencun upgrade, leading to decreased gas fees and a reduction in its burn rate. The company noted that Ethereum seemed to be following an “ultra-sound” money narrative after The Merge event but is now facing challenges that could increase its total supply.
The transition to an inflationary state has resulted in a decrease in the amount of ETH being burned daily, as shown by UltraSound.Money data which recorded a mere 519 ETH burned in the past day, marking a record low for the network.
