IntoTheBlock data showed fees associated with transacting on the ETH blockchain traverse 1-year lows. That could be primarily due to transaction movement. These transfers previously happened on mainnet ETH to L2 scaling solutions.
While writing this blog, the overall charges to utilize the ETH network hovered at 1,490 ETH. The figure was at 5,280 ETH one year ago. Ethereum has seen reduced fees since hitting the 81,750 ETH high on May 1.
Deriving security from Mainnet ETH, Layer2 scaling solutions aggregated several smaller transfers before sending them to the Ether mainnet (L1). Meanwhile, L2s reduce platform congestion on mainnet ETH while enhancing transaction throughput.
Mainnet ETH congestion triggers surged gas charges. Meanwhile, L2s allow transactions toll into one transfer to Mainnet Ether. That ensures reduced gas fees. Besides the benefits, how have L2 activities impacted the Ethereum blockchain since the year started?
YTD Fees Analysis
Besides the drop in daily charges to operate on the Ethereum network, average fees per transfer allow plunged substantially. While publishing this content, transacting on Ethereum costs $2.55. That reflects a more than 90% average fees per transaction drop. This figure hovered at $26.39 on January 1.
The network incentivizes miners via a tip feature to prioritize transfers, translating to quicker transactions. That’s the average priority fee. Meanwhile, these fees have slumped since January as move activity migrated to layer2s.
Moreover, while writing these lines, Ethereum’s average priority fee hovered at $0.000005556, indicating a 70% drop from the early January figure of $0.000018631.
What About Miners?
Mainnet Ethereum has recorded a consistent miner reward decline since the year started. That comes from block subsidy and transaction fees.
IntoTheBlock defines transaction charges as a dynamic fee for blockchain transactions and block subsidy as the reward a miner gets after the network’s native token issuance. These indexes have slumped by 89% and 4% since 2022 started.
Besides the miner reward drop, Token Terminal data showed that Ethereum had recorded nearly $20M in daily losses in the previous year. Moreover, the network’s daily revenue has dropped sharply since the year began.
As the Merge nears, the focus remains on staking $ETH as market players wait for the blockchain’s transformation into a PoS mechanism. While publishing this content, Glassnode data confirmed 13,334,442 Ethereum staked.