Data from Dune Analytics indicates that as of June 30, the average gas price was under 3 Gwei, or $0.14. Notably, last week had nine out of the ten lowest gas price hours.

An integral part of the Ethereum network are gas costs. By providing incentives to validators, they guarantee network security and pay for different functions. Additionally, these costs serve as a disincentive to spam assaults.

Analysts believe that the layer-1 (L1) market's increased efficiency is the reason for the notable decrease in fees. Increased layer-2 (L2) traffic and the addition of "blob transactions" via EIP-4844, which has improved Ethereum's scalability, are what are responsible for the efficiency.

Historical context

The median gas price varied from 15 to 20 Gwei a year ago, which is significantly less than the costs of today. Dune Analytics reported on March 5 that the top gas price in March 2024 was 83 Gwei.

However, after the Dencun upgrade on March 13, median gas prices have been continuously falling. For example, on April 27, the median gas price of Ethereum dropped to 6.43 Gwei, the lowest single-day price in the previous three years, marking a three-year low.

Furthermore, it dropped even further on June 23, hitting a level below 3 Gwei that hadn't been reached since 2020. This led to a string of some of Ethereum's lowest gas fee hours over the last seven years.

Industry observers surmise that Ethereum's L2 networks are successfully lowering transaction costs on the second-most valuable blockchain in the world, as seen by the steadily declining gas prices.

Why lower gas fees matter

There are several reasons why the decrease in Ethereum's gas costs is noteworthy. Reduced costs encourage more users and developers to interact with the platform by opening up the network to a wider audience.

It may result in a rise in the use of Ethereum-based services and apps, strengthening the network's standing within the blockchain ecosystem.

Furthermore, reasonable gas prices support the upkeep of the network's operation and security without driving away smaller users.

Encouraging innovation and guaranteeing that the advantages of blockchain technology are widely dispersed depend on this democratization of access.

Finally, since high transaction costs have historically hampered participation in sectors like decentralized finance and NFTs, decreasing gas prices may help to revive these industries.