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Anthony Sassano, co-founder of EthHub, believes that there are four reasons for the reduction of Ethereum Gas fee: a 20% increase in Gas Limit, a cooling of the crypto market, the implementation of Layer 2 solutions, and the adoption of Flashbots.
Original title: “Ethereum Gas fee dropped to a new low this year, and this is caused by 4 key factors”
Written by: Reynaldo Marquez
Translation: Blockchain Knight
Ethereum has the largest increase in the daily chart of major cryptocurrencies (in terms of market capitalization). At the time of writing this report, the price of Ethereum has risen by 4.9%, with a transaction price of $2,328.58. It is sideways on a weekly basis with a monthly increase of 46.7%.
The further appreciation of Ethereum seems imminent. The network is solving an “unfavorable factor” facing competitors and improving higher transaction fees to gain a higher market share. Data from ethGasStation shows that the cost of a fast or standard transaction is between 45 and 50 gwei.
ETH’s gas fee has been declining since April 20. On April 20, this indicator soared to an average of $37, the highest cost since February 2021. Now this trend seems to be reversing, the indicator is currently close to this year’s lowest point, with an average transaction cost of $10.22.
Anthony Sassano, the co-founder of EthHub, believes that there are four main reasons why fees are getting cheaper: Gas limit (block size) has increased by 20%, the crypto market has cooled down, the implementation of Layer 2 solutions, and the adoption of Flashbots, the latter seems to be increasing Play an important role.
According to NewsBTC reports, Flashbots is an open tool and an improved organization for maintaining miner extractable value (MEV). It is different from the optimal gas fee auction (PGA) in that Flashbots has a positive effect on reducing gas fees and maintaining a “transparent” MEV ecosystem.
The developer with the pseudonym “Stephane” pointed out that nearly 72.22% of the Ethereum hash rate has been involved in Flashbots and their tools, and miners have used them to get the most returns. This metric has increased by nearly 15 in the past two weeks. %.
The implementation of EIP-1559 in the London hard fork caused dissatisfaction among mining companies, who are committed to finding new ways to maximize profits. As an investor, Spencer Noon believes that Flashbots may become the main force in the Ethereum trading market.
“Deep into the early Flashbots data and good genesis blocks, Ethereum miners have got an incredible new source of income. Each block has increased by 5%, and this number will continue to rise. Few people know What a profound impact this has on Ethereum’s budget.”
In addition, Ethereum investor Aftab Hossain believes that EIP-1559 can reduce transaction bidding wars and stabilize transaction costs . More importantly, some negative MEV strategies may be ineffective for the interests of Flashbots.
However, Hossain expects that transaction fees will “rise” to the current level, because Ethereum’s blockchain is used for many purposes, and the demand has increased greatly , at least in the short term as a segmentation and new features ETH 2.0 is under development .
Hossain pointed out: “It doesn’t matter, Layer1 will still be used for various TX, because it has unique composable utilities and values, which Layer2 may not be able to provide for a period of time.”
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