Gas fees on the Ethereum Layer 1 blockchain fell to simply 0.067 Gwei on Sunday, amid a lull in crypto markets triggered by October's historic market crash.
The average price to perform a swap on Ethereum is just $0.11, selling non-fungible tokens (NFT) charges a fee of $0.19, bridging a digital asset to a different blockchain network costs users $0.04, and borrowing on-chain costs $0.09, in keeping with Etherscan on the time of writing.
Ethereum network transaction fees reached a current high of 15.9 Gwei on October 10, the day of the market flash crash that caused some altcoins to lose over 90% of their value in 24 hours.
However, by October twelfth the fees had fallen again to simply 0.5 Gwei and mostly remained well below 1 in October and November.
Ethereum Layer 1 gas prices last month. Source: Etherscan
Investors and traders can reap the benefits of the low transaction fees to execute on-chain transactions at the bottom layer. However, analysts and crypto industry executives warn that the excessively low fees could spell trouble for the Ethereum ecosystem.
The Ethereum base layer has been recording a lack of revenue since 2024
During the 2021 bull market, Ethereum Layer 1 transaction fees could cost users $150 or more during times of network congestion.
However, following the Ethereum Dencun upgrade in March 2024, which reduced transaction fees on Ethereum's Layer 2 scaling networks, fees dropped significantly, leading to a 99% drop in Ethereum revenue.
Critics say the low network fees are unsustainable for any blockchain network and pose each financial and security challenges as a consequence of a scarcity of revenue that may incentivize validators or miners to process transactions and secure the blockchain.
Since fees reply to user demand, low fees and revenue is also a signal that users are moving away from a specific blockchain network.
Ethereum particularly has opted for a scaling strategy based on an ecosystem of separate Layer 2 networks, which represents a double-edged sword, in keeping with research from crypto exchange Binance.
While Layer 2 networks allow Ethereum to scale and compete with newer, high-throughput chains, Layer 2 networks also cannibalize base layer revenue, creating additional competition for Ethereum inside its own ecosystem.
