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As more and more Ethereum expansion solutions are launched, Gas fees are expected to continue to remain at a low level.
Original title: ” Data interpretation of why the gas cost of Ethereum will drop to a six-month low “
Written by: Yogita Khatri
In the past month, gas fees on the Ethereum blockchain have been reduced by nearly 90%, and transaction costs have dropped significantly. However, what are the special reasons behind the decrease in gas cost? Let us find out through the data chart.
According to the data from The Block Data Dashboard, the average transaction fee for Ethereum is now about US$4.5, while it was close to US$45 a month ago. This means that the current transaction cost has dropped by 90%, and the average transaction fee is in the past six months. Low point. It is worth noting that the average transaction fee data is taken from the 7-day moving average (7MDA) value, which means that it represents a short-term trend.
So, why did the gas cost plummet from a historical high to a trough in just one month? In fact, there are mainly the following factors:
First, Ethereum transaction volume has dropped significantly in recent weeks. With the recent overall collapse of the cryptocurrency market, the trading volume of decentralized finance (DeFi) and non-fungible tokens (NFT) has declined.
The data will not lie: The current average daily transaction volume of Ethereum has dropped from 1.65 million a month ago to about 1.2 million. According to The Block Data Dashboard data, the current NFT transaction volume and transaction volume have also declined to a certain extent.
Secondly, another factor behind the lower gas cost is the increasing use of Layer 2 expansion solution Polygon (formerly Matic Network). Especially in recent weeks, the transaction volume on the Polygon network has increased significantly.
According to data from the network tracker PolygonScan, the average daily transaction volume on the Polygon chain has increased from approximately 1.5 million in the past to close to 7.5 million today-which is more than five times the average daily transaction volume of Ethereum.
Polygon is a Proof-of-Stake (PoS) blockchain, while Ethereum is still a Proof-of-Work (PoW) blockchain. The transition to the Proof-of-Stake consensus model has not yet been completed. Frankly speaking, although these two models have their own advantages and disadvantages, the workload proof consensus model is indeed limited in transaction processing capabilities, which usually leads to higher network transaction costs.
However, one thing is certain: Due to the increasing market demand for Ethereum expansion solutions, Polygon has become the most popular solution for users at this stage. As The Block Research recently reported, there are currently more than 350 DeFi projects in the Polygon ecosystem alone.
Finally, the increased use of Flashbot transactions is another factor leading to the reduction of gas costs. Flashbots allows traders to communicate with Ethereum miners off-chain, such as executing transactions in private channels. This method greatly reduces the number of invalid transactions on the Ethereum blockchain, thereby further reducing gas fees. In other words, the number of robots currently trying to increase gas prices for transaction priority is decreasing.
In addition, Polygon’s lock-up volume has also hit historical highs recently. It broke down USD 7 billion on June 13, USD 8 billion on June 15 and hit USD 8.5 billion on June 16 when the Japanese text was written to reach 8.51 billion USD. US dollars (net lock-up volume of 7.4 billion US dollars), the three agreements with the largest amount of lock-ups on the network are: Aave (3.7 billion US dollars), SushiSwap (1.6 billion US dollars), and QuickSwap (1.5 billion US dollars).
There is also good news. As more and more Ethereum expansion solutions (such as Optimistic Rollups) will be launched in the near future, Ethereum gas fees are expected to continue to remain at a low level.
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