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Ethereum Fees Plunge Ahead of Merge Event

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According to the data provided by the blockchain data platform Dune AnalyticsEthereum’s average seven-day fee hit its lowest level in 2022, dropping to just 16.98477 Gwei (roughly $7.51 at press time).

Image author dune.com
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During the 2021 bull market, the Ethereum network was constantly plagued by exorbitant fees that averaged roughly $40. This has made the blockchain inaccessible to the average person, leading to the emergence of alternative platforms such as Solana.

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Ethereum fees remain relatively low despite the fact that the price of the most popular cryptocurrency has risen significantly over the past month. On Sunday, the price of bitcoin rose to $1,664, the highest level since early June, before pulling back down.

Will the merger lower gas fees?

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The recent price spike came on the cusp of a long-awaited merger upgrade that will allow the network to transition to a Proof-of-Stake algorithm.

While Ethereum 2.0 will consume much less power compared to the Proof-of-Work iteration of the second largest compute-intensive cryptocurrency, the merger will not lower gas fees right away.

Earlier this month, DeFi trader Vivek Raman explained that fees are not a function of the consensus mechanism. Hence, users will still have to use other layer 2 solutions to spend less money on transactions.

While the Ethereum 2.0 update was originally supposed to be accompanied by “sharding,” a technology that splits the main chain into many shards, this is no longer the case. Therefore, the merger will not really solve the problem of scaling the network by speeding up transactions and lowering fees.



Credit : u.today

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