July remains a prolific month for the Ethereum blockchain, as the value of ether saw a 61% surge. Despite this interesting growth, the second cryptocurrency with the highest market capitalization is still far from its ATH reached in November 2021. Investors can still rejoice, the fees applied on the blockchain continue to drop, with transactions made at less than $5. This represents the lowest average price on Ethereum for almost 2 years.
Lowest average transaction fees since December 2020?
The year 2022 is quite delicate for cryptocurrencies, they are all experiencing a general decline. Ethereum is not immune to the crisis and is down 60% from its historic peak on November 10, 2021. However, we note a gradual increase in its value compared to the last few months, with the added bonus of a drop in the average fees applicable on the network. If we take only the date of last July 30, the transactions show an average of 0.0001 ETH, which represents the equivalent of 1.70 dollars.
The observation is even more obvious when analyzing the median charges applied on the network. Indeed, all the transactions carried out show prices whose average is within a range of $0.0003 to $0.663 on the date of July 30. Throughout the month, these same median fees remained below $2.50 per transaction. You have to go back to December 2020 to see such low fees on the Ethereum blockchain.
Why Ethereum has such low transaction fees?
The ethereum blockchain has a reputation for charging very high transaction fees. Regularly, the transaction fees showed a higher value than the transaction itself. Because of this, many miners have turned to cheaper blockchains like Solana and Avalanche.
To try to solve the problem, Vitalik Buterina founding member of Ethereum, had proposed EIP-4488 from November 2021. This temporary solution was intended to significantly reduce network costs. This strategy had proved unsuccessful and above all ephemeral, since the costs remained so high. The lowest average fee on each ERC20 transaction was $39.71 and those for DEXs were $122.18 in November. Unlike the first time, the decline does not seem fleeting and even continues to progress. Undoubtedly, this maneuver aims to seduce investors in this bear market context.
Conclusion
Blockchain Ethereum continues to offer discounted transaction fees. A rather surprising thing compared to the usual practices of the platform. With transactions below 5 dollars, we are witnessing the lowest fees since January 2020, we are far from the rates charged during its ATH in November 2021. For the moment, this drop has no impact on the value of Ether which still remains far from its record value.
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