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<p class="is-style-lead">Ethereum (<a href="https://crypto.news/price/ethereum/" target="_blank" rel="noopener noreferrer nofollow">ETH</a>) has recorded its lowest average gas fees since November 2016.</p>
<p>According to Dune Analytics <a href="https://dune.com/queries/3874732/6518853" target="_blank" rel="noopener noreferrer nofollow">data</a>, on June 30, the average gas fee dropped to just 3<a href="https://crypto.news/glossary/gwei-in-ethereum/" target="_blank" rel="noopener noreferrer nofollow"> Gwei</a>, equivalent to $0.14. Notably, nine of the 10 cheapest hours for gas fees occurred last week.</p>
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   <p lang="en" dir="ltr">Ethereum just had its lowest hour of average gas prices since November 2016. 9 of the 10 cheapest hours have been this week <a href="https://t.co/sd0j9r2Dt1" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/sd0j9r2Dt1</a></p>— Conor (@jconorgrogan) <a href="https://twitter.com/jconorgrogan/status/1807261226575011848?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">June 30, 2024</a>
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<p>Gas fees are essential to the Ethereum network. They cover the costs of various operations and ensure the network’s security by incentivizing validators. These fees also act as a deterrent against spam attacks.</p>
<p>Analysts have attributed the significant drop in fees to improved efficiency in the layer-1 (L1) market. The efficiency is driven by a combination of increased <a href="https://crypto.news/tag/layer-2/" target="_blank" rel="noopener noreferrer nofollow">layer-2</a> (L2) volume and the introduction of “blob transactions” through EIP-4844, which has enhanced Ethereum’s scalability.</p>
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<h2 class="wp-block-heading" id="strong-historical-context-strong"><strong>Historical context</strong></h2>
<p>A year ago, median gas prices ranged between 15 to 20 Gwei, a stark contrast to today’s much lower figures. In March 2024, peak<a target="_blank" href="https://crypto.news/ethereum-3600-gas-fees/" rel="noopener noreferrer nofollow"> gas prices</a> reached 83 Gwei, as recorded on March 5 by Dune Analytics.&nbsp;</p>
<p>However, median gas prices have steadily declined following the <a href="https://crypto.news/dencun-is-finally-live-did-it-actually-reduce-fees/" target="_blank" rel="noopener noreferrer nofollow">Dencun</a> upgrade on March 13. For instance, Ethereum’s median gas price hit a three-year low in April, dropping to 6.43 Gwei on April 27, the seventh-lowest single-day median gas price recorded in the past three years.&nbsp;</p>
<p>Additionally, on June 23, it went even lower, falling below 3 Gwei, a level not seen since 2020. This triggered a run of some of the lowest hours for gas fees on Ethereum in the last seven years.</p>
<p>Industry watchers believe that the increasingly low gas prices are an indication that Ethereum’s L2 networks are effectively reducing transaction costs on the world’s second-most valuable blockchain.</p>
<h2 class="wp-block-heading" id="strong-why-lower-gas-fees-matter-strong"><strong>Why lower gas fees matter</strong></h2>
<p>The drop in Ethereum’s gas fees is significant for several reasons. Lower fees make the network more accessible to a broader audience, encouraging more users and developers to engage with the platform.&nbsp;</p>
<p>It can lead to increased adoption of Ethereum-based applications and services, further solidifying the network’s position in the blockchain ecosystem.</p>
<p>Moreover, affordable gas fees help maintain the network’s security and functionality without pricing out smaller participants.&nbsp;</p>
<p>This democratization of access is important for fostering innovation and ensuring that the benefits of blockchain technology are widely distributed.</p>
<p>Finally, lower gas fees can stimulate activity in sectors like decentralized finance and NFTs, which high transaction costs have previously hindered.</p>
<p>Read more: <a href="https://crypto.news/vc-roundup-conduit-raises-37m-while-megalabs-ora-secure-20m-each/" rel="noopener noreferrer nofollow"> VC roundup: Conduit raises $37m while MegaLabs, Ora secure $20m each </a></p>

Ethereum gas fees plummet to historic lows: Can the network broaden its appeal?

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