Ethereum fees plunge since Dencun, but the reason is not what you think

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Transaction fees on the Ethereum mainnet have dipped sharply since the Dencun Upgrade, with the transaction count remaining roughly the same.

But while much of the hype has centered around cost advantages on layer-2 as they are popularly called, the base layer was also seemed to be reaping the benefits of the critical technological change., gas fees on the mainnet have sharply dipped since Dencun’s execution on the 14th of March, with the daily transaction count remaining roughly the same.

Notably, Ethereum handled an average of 1.23 million daily transactions prior to Dencun, collecting an average daily fees around $28.7 million.AMBCrypto investigated further using Glassnode data and spotted a sharp drop in average fees paid per transaction on Ethereum in the past two weeks.

Note that a set amount of ETH is burned for each transaction. This corresponds to the minimum amount required for a transaction to be considered valid, i.e., base fee. As evident, the burn rate dropped sharply in recent weeks, pushing the inflation rate up. The drop in deflationary pressure likely had a role to play in ETH’sAniket is a full-time journalist at AMB Crypto. With experience in news publishing and content management, he is now increasingly tangled up in the web of cryptocurrencies and blockchains. His focus lies on the intersection between cryptos and traditional finance.

 

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