The Average Ethereum Gas Fee Drops to 8.8 Gwei
On October 8, the average Ethereum gas fee dropped to 8.8 Gwei, reaching levels not seen since October 2, 2022, when the average gas fee on the network was 8.4 Gwei. Gas prices on Ethereum are typically measured in Gigawei (Gwei), which is equivalent to 10^9 Wei. Wei represents the smallest denomination of ETH, with 1 ETH equal to 10^18 Wei.
Reasons for the Decline in Gas Fees
The decline in gas fees can be attributed to a decrease in users on DeFi applications, NFTs, layer-2 networks, and various Telegram bots. According to data analyst Hildobby’s Dune dashboard, the weekly trading volume for NFTs has plummeted to two-year lows. This reduction in activity has contributed to the decrease in gas fees.
Ethereum Burn Levels Hit Yearly Lows
On Monday, the amount of Ethereum burned reached its lowest point for the year, with only 7,084 ETH being burnt. The last time Ethereum experienced such minimal burn levels was on September 19, shortly after the Ethereum Merge update introduced the burning mechanism.
Growth Rate of Ethereum Supply
Currently, Ethereum’s supply is growing at a rate of approximately 1,450 ETH daily, which is equivalent to $2.2 million worth of Ethereum. This data comes from data aggregator Ultra Sound Money. The annual inflation rate at this rate is 0.44%.
Hot Take: Decrease in Gas Fees and Burn Levels Reflect Market Trends
The recent decrease in gas fees and burn levels on Ethereum can be seen as a reflection of the current market trends. The decline in activity in DeFi, NFTs, and layer-2 networks has resulted in lower demand for transactions, leading to reduced gas fees. Additionally, the decrease in burn levels indicates a slower pace of Ethereum being taken out of circulation. These developments suggest a cooling-off period for Ethereum, potentially signaling a shift in market dynamics. It will be interesting to see how these trends continue to evolve in the coming months.
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