Ethereum

2024

Merge

<p>In a major development, the Ethereum gas fee has touched its lowest level in four years since 2020. As of now, the average gas fee on <a href="https://coingape.com/bitcoin-and-ethereum-whales-buy-every-price-dip-relief-rally-soon/" target="_blank" rel="noopener noreferrer nofollow">Ethereum</a> is 6.8 Gwei. As a result, all on-chain operations such as cross-chain bridging, asset swaps, NFT minting, etc. have turned out to be more affordable to users.</p>
<h3 id="the-post-dencun-upgrade-effect-for-ethereum">The Post Dencun Upgrade Effect for Ethereum</h3>
<p>After the post-Dencun upgrade, which brought about blobs and enhanced network efficiency, there was a noticeable decrease in fees. This upgrade piqued developers’ interest in how gas prices might rise if market activity were to surge.</p>
<p>The <a href="https://coingape.com/blog/what-should-the-crypto-market-expect-from-ethereum-dencun-upgrade" target="_blank" rel="noopener noreferrer nofollow">Dencun upgrade</a> has successfully disconnected Ethereum’s transaction fees from network activity, ensuring that fees remain low even during times of increased usage.</p>
<p>However, the latest report from CryptoQuant suggests that the Dencun upgrade has made the Ethereum blockchain inflationary once again. This has potentially killed its characteristics of being an “ultra-sound” money.</p>
<p>According to a <a rel="noopener noreferrer nofollow" href="https://cryptoquant.com/community/dashboard/663b98328403fa3034f40749" target="_blank">report</a> published on Wednesday by CryptoQuant, the Ethereum network has experienced a decrease in transaction fees following the Dencun upgrade. Consequently, the amount of ether burned has reached one of its lowest levels since the Merge.</p>
<p>Furthermore, the report highlighted that the supply of ether is currently increasing at its fastest daily rate since the Merge event on the Ethereum network.</p>
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 <p lang="en" dir="ltr"><img src="https://s.w.org/images/core/emoji/15.0.3/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;"> The Dencun upgrade has made <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$ETH</a> inflationary again. Is this the death of "Ultra Sound" money?</p>
 <p>Let's dive into <a href="https://twitter.com/hashtag/ethereum?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#ethereum</a> <img src="https://s.w.org/images/core/emoji/15.0.3/72x72/2b07.png" alt="⬇" class="wp-smiley" style="height: 1em; max-height: 1em;"> <a href="https://t.co/ljDPMeVHKu" rel="noopener noreferrer nofollow">pic.twitter.com/ljDPMeVHKu</a></p>
 <p>— CryptoQuant.com (@cryptoquant_com) <a href="https://twitter.com/cryptoquant_com/status/1788911915185352884?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 10, 2024</a></p>
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<p>The Cryptoquant analysts noted: “Before the Dencun upgrade, the higher network activity on Ethereum meant higher fees burned and hence less ether supply. However, after the Dencun upgrade, the total amount of fees burned has decoupled from the network activity”.</p>
<p>The report’s findings suggest that, given the present level of network activity, Ethereum is unlikely to return to a deflationary state. Consequently, the narrative surrounding ether as “ultra-sound” money has likely faded, unless there is a significant increase in network activity to revive it.</p>
<h3 id="eth-price-action">ETH Price Action</h3>
<p>The <a href="https://coingape.com/price/ethereum/" target="_blank" rel="noopener noreferrer nofollow">Ethereum (ETH) Price</a> continues to remain volatile falling over 4% in the last 24 hours and currently trading around $2,900 levels. ETH has largely underperformed BTC in recent times and this could continue going further believe some market analysts.</p>
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 <p lang="en" dir="ltr">The last 2 times that <a href="https://twitter.com/hashtag/ETH?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#ETH</a> / <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#BTC</a> broke down, <a href="https://twitter.com/hashtag/ETH?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#ETH</a> / <a href="https://twitter.com/hashtag/USD?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#USD</a> then dropped approximately 70%.</p>
 <p>In a world where everyone has been preaching Alt Season for the last 2.5 years into a <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#BTC</a> dominance uptrend, I thought I would remind people that there is still downside risk. <a href="https://t.co/63Pi8qKpLu" rel="noopener noreferrer nofollow">pic.twitter.com/63Pi8qKpLu</a></p>
 <p>— Benjamin Cowen (@intocryptoverse) <a href="https://twitter.com/intocryptoverse/status/1788062766835585397?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 8, 2024</a></p>
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<p>The ETH/BTC pair has breached its support level of 0.05, a pattern often signaling a forthcoming price decline. Should the ETH/BTC pair dip below 0.04, the analyst anticipates Ethereum’s price potentially plummeting to approximately $2,500.</p>
<p>The post <a href="https://coingape.com/ethereum-gas-fee-hits-four-year-low-after-dencun-upgrade-a-boon-or-bane/" rel="noopener noreferrer nofollow">Ethereum Gas Fee Hits Four-Year Low After Dencun Upgrade, A Boon or Bane?</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.</p>

Ethereum Gas Fee Hits Four-Year Low After Dencun Upgrade, A Boon or Bane?

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