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Ethereum Gas Fees At 6 Months Lowest Amid Market Cooldown

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@xabi
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Evening

Ethereum transaction fees is on decline as the blockchain activity cools down. As per BitinfoCharts, Ethereum average transaction fees dropped to $2.312 on 26 Jul, lowest since December last year.

Ethereum is currently trading at $2100, more than half of its all time high $4,382.73 on 12th May. As a natural response to market cooldown network activity is also on decline, with daily transactions hovering around 1 million compared to May's all time high of 1.637 million.

However, market cooldown is not the sole reason of reduced network activity and reduced transaction fees. Increasing adoption of layer 2 scaling solutions like polygon is also a major contributing factor, as many defi protocols like SushiSwap, Aave and Kyber Network have already moved to polygon.

Competing blockchains like Binance Smart Chain offering fractional transaction fees in comparison are also to blame, with many native Ethereum defi projects expanding their reach to a BSC offering their users a faster and cost effective network alternative.

It seems with current dull market, the issue of soaring gas fees has been suppressed temporarily. But gas fees remains a major outstanding issue for Ethereum network, as with slight increase in network activity gas fees tend to shoot up pretty fast.

Hopefully the upcoming deflationary EIP-1559 will significantly resolve the gas fees issue. For now, layer 2 solutions to the rescue!

Finger Crossed🤞🤞🤞

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