The post Ethereum and Bitcoin transaction fees tank amid high network activity and market turbulence appeared on BitcoinEthereumNews.com.

Ethereum and Bitcoin are experiencing a notable decline in transaction fees, reaching multi-month lows despite high network activity. Also Read: Bitcoin price falls amid US stock market rally, down 10% from June high This development coincides with one of the most challenging weeks for the broader crypto market in 2024, with Bitcoin falling below $63,000 and many altcoins experiencing double-digit losses. Ethereum’s gas prices – the fees required for conducting transactions on the network – have plunged to levels not seen in years. The average gas price on Ethereum recently stood at just 7.3 Gwei, a dramatic decrease from the 98.68 Gwei recorded on March 5. This significant drop makes the network considerably more affordable for developers and users. Source: Ychart The reduction in Ethereum gas fees is particularly noteworthy given the high level of network activity. Ethereum Layer 2 solutions drive down prices Data from L2Beat shows that on June 21, Ethereum Layer 1 and Layer 2 protocols recorded an average of 299 transactions per second. This paradox of low fees amid high activity is primarily attributed to the increased adoption and efficiency of Layer 2 (L2) solutions. L2 solutions are designed to enhance Ethereum’s scalability, process transactions off the main Ethereum chain, thereby reducing congestion and costs. The widespread adoption of these protocols highlights their critical role in easing network traffic and lowering gas prices. According to Pistachio Fi founder Brian Smocovich, The L1 gas market is now more efficient because most volume is on L2s, L2 -> L1 settlement is 100x cheaper than pre-4844, and we have the gas market efficiencies of EIP-1559. Brian Smocovich The impact of these efficiency gains is evident in the reduced cost of everyday transactions. For example, performing a swap on Uniswap now costs just $1.06, trading an NFT on Seaport costs…

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Filed under: News - @ June 24, 2024 3:30 pm