KEY POINTS

  • Ethereum gas fees have dropped from record highs as per Etherscan
  • The gas fees at the start of 2021 was in the hundreds of dollars
  • A decline in volume of NFT transactions on Ethereum could be the reason

Ethereum, the world's second-biggest blockchain network, has seen a considerable decline in gas fees in the last few days while its price still languishes under the $2,000 mark.

The gas fee is the amount that people pay to carry forward their transactions on the Ethereum network. If, for example, you are purchasing an NFT worth 10 ETH, you might have to pay a certain amount as gas fees as well.

According to the latest data provided by Etherscan, as of 10:33 pm ET, the gas fees required for a single transaction on the Ethereum network range between 26 gwei ($1.09) to 27 gwei ($1.13). The gas fees on Ethereum are measured in gwei, which represents a very small amount of Ether (0.000000001 ETH).

According to the chart provided by Etherscan, in January, the average gas fee was in the 81 gwei-to-218 gwei range as people paid hundreds of dollars for a single transaction. Comparing the past data to the current scenario, we can confirm that there has been a significant decline in the gas fee required to complete transactions on the Ethereum network.

This can be attributed to the decline in gas-heavy transactions like minting NFTs or completing transactions on Uniswap, a decentralized exchange. According to Google Trends data, the searches related to NFTs have dropped down to all-time lows, and it seems that people are losing interest in the world of digital collections.

According to the data from CoinMarketCap, the price of Ether (ETH) is nearly 60% lower than its all-time high of $4,900 witnessed on Nov. 16 last year. The price has surged more than 6% in the last 24 hours, but overall, the token is still trending downward. Additionally, traders tend to lay low during a bearish and uncertain market, another reason for a decline in Ether transactions.

With The Merge coming in August, as per Ethereum co-founder Vitalik Buterin, the high gas fees issue on the Ethereum network might be resolved soon.

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