Ethereum Fees Drop Significantly, Attracting Market Interest
Ethereum, the second largest cryptocurrency by market capitalization, has experienced a notable fee reduction. This decrease in fees is drawing attention within the cryptocurrency market.
IntoTheBlock reported via social media a quarterly decrease in total Ethereum fees, reaching levels not seen since 2020.
Data from IntoTheBlock shows total Ethereum fees decreased by 59.6% to $208 million.
During the same quarter, Ethereum’s price decreased by 49%, resulting in a market capitalization loss exceeding $170 billion.
This quarterly performance is the third lowest for Ethereum since 2016.
Gas Limit Increase and Layer-2 Adoption Explain Fee Reduction
IntoTheBlock attributes the fee reduction to two main factors: an increase in the gas limit and increased use of layer-2 (L2) solutions.
In February 2024, Ethereum increased gas limits for the first time since 2021.
Validators approved this change, which was implemented automatically without a hard fork.
Validators increased the gas limit to approximately 32 million units, with a maximum capacity of 36 million units.
This increased Ethereum’s transaction capacity. The gas limit defines the maximum gas allowed in one block.
Transactions exceeding this limit are held for later blocks or compete for current block inclusion based on gas price.
The gas limit was last raised in 2021, from 15 million to 30 million gas units.
Pectra Upgrade Nears Ethereum Mainnet
Pectra, a major Ethereum upgrade since the 2022 proof-of-stake transition, is scheduled for Ethereum mainnet launch on May 7.
Ethereum developers announced the finalized Pectra date at a meeting on Thursday.
Initially planned for March 2025, Pectra was delayed due to finality problems on the Holesky testnet.
It has operated effectively on the Hoodi testnet, created to address testnet issues.
The Sepolia testnet also had a minor issue in early March, which was identified and resolved.
Ethereum has experienced a recent market decline, decreasing by 6.3% weekly but increasing 0.64% in the last 24 hours and trading at $1,778 at press time.
Also Read: Experts Affirm Ethereum’s Long-Term Potential Despite Recent Price Drops
