The average transaction fee on Ethereum has reached record lows as more activity moves to the Layer-2 (L2) networks on the chain.According to Ultrasound.money data, the average gas has dropped to 4.81 Gwei — the lowest level since the network completed the Merge event in 2022.Market observers attributed this decline to increasing activity on L2 networks following the completion of the Dencun upgrade. The Dencun upgrade significantly reduced fees for L2 networks, making transacting on the base layer less attractive.Notably, the blockchain analytical platform IntoTheBlock reported:“An increasing number of transactions are now being settled on Ethereum Layer 2s. Last month, the three largest L2s hit a record 82% transaction share of all Ethereum transactions.”Furthermore, the number of transactions on Arbitrum has seen strong growth, reaching over 2 million daily transactions on May 8 — a significant rise from the early March average of 1 million.L2beats data further indicates that Base and Arbitrum averaged 30 and 20 transactions per second, respectively, while Ethereum managed 13 transactions per second during the same period.Meanwhile, CryptoQuant analysis revealed that ETH has transitioned to an inflationary state post the Dencun upgrade, resulting in diminished gas fees and reducing its burn rate.In light of this development, the firm noted:“Since The Merge, Ethereum appeared to be on track with its ‘ultra-sound’ money narrative, showing a slight reduction in the total ETH supply. However, the post-Dencun upgrade challenges this by reducing transaction fees and the ETH burn rate, leading to an increase in supply.”CryptoQuant further elaborated that the Dencun upgrade environment has presented a scenario where maintaining deflation would require a substantial increase in network activity, contrasting the current trend of low gas fees and reduced burn rates.Notably, UltraSound.Money data shows that the daily amount of ETH burned during the past day was 519 ETH, a record low for the network.Oluwapelumi values Bitcoin’s potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting. Follow us on X for your essential dose of daily crypto news and deep dives.The S-1 filing follows the SEC’s approval of NYSE Arca’s proposed rule change on behalf of ProShares.All spot ETH ETFs have yet to launch despite recent developments.ICBC compared Bitcoin to gold and said Ethereum has established itself as “digital oil” capable of powering myriad applications across the web3 ecosystem.DeFillama data shows the platform’s TVL rose 135% despite the attack.CryptoSlate’s latest market report dives deep into the effects corporate Bitcoin purchases have on the market.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
