Ethereum network fees drop to a seven-month low

The prices of the Ethereum network (quotation ETH) have been a bane to everyone who uses it in the past year or so. They rose to astronomical levels on several occasions during the 2021 bull market.

Average transaction fees skyrocketed above $ 60 in May, September and November last year and have stayed above $ 25 for the past five months or so. Things got so bad that Ethereum was dubbed a "whale chain" last year because only big carriers could afford to use it.

Transaction fees vary depending on the operation. A simple ERC-20 token transfer is the cheapest action on the network. A complex smart contract interaction, on the other hand, will cost much more.

Fortunately, things seem to have calmed down on the Ethereum network, and as a result, gas prices have dropped.

Gas tariffs are falling

The average cost of a transaction on the Ethereum network has dropped below $ 10. This is its lowest level since the beginning of August, according to Bitinfocharts.com.

The analytics platform currently reports an average transaction fee of $ 8,78 on the Ethereum network. The average has dropped 83% since its last peak on January 10, when it hit $ 50.

Blockchain explorer Etherscan reports that the average transaction fee has dropped to $ 1,38 as of March 9. Either way, that's good news for anyone using the net.

Ethereum is even more expensive than rivals like Cardano, Polkadot, and Solana, but it's still the industry standard for smart contracts.

Additionally, Ethereum is set to move to proof-of-stake consensus in the coming months, and scaling updates are expected to follow. These will alleviate some of the painful costs of using the net when they are introduced later this year.

A consequence of the high costs was an increased amount of ETH burned through the EIP-1559 mechanism. Last year, this update was introduced to "burn" or destroy a portion of the transaction fees.

So far, 1,96 million ETH has been burned through the process, worth an estimated $ 5,2 billion at current prices.

ETH price outlook

Ethereum prices have fallen 2,7% in the past 24 hours, trading at $ 2.641 at the time of writing. Being in a downtrend, ETH has lost nearly 11% in the past week. However, last week saw a $ 25 million capital inflow into Ethereum-based institutional crypto funds.

ETH is currently down 45% from its Nov 10 all-time high of $ 4.878. By comparison, Bitcoin has lost 41% since its peak on the same day last year.