Over the past year, Ether's rising gasoline costs have been one of the biggest concerns for the cryptocurrency industry. Well, especially because of Ether's major role in DeFi and NFT. Rising gasoline costs have inadvertently led to more congestion. Hence, higher transaction times and costs. Ether's development team has been working hard to address these issues. However, recently gasoline costs seem to be going backwards.
In fact, the average network cost of ethereum hit a six-month low this week. And it's down nearly 80 percent from its recent high on Jan. 10. At the time of writing, the average Ether transaction cost was 0.0046 ETH or $12.14, down from about $52 at the beginning of January.
Since the beginning of January, the median gas fee for Ether has also declined by more than 84% in a row. At the time of writing, it was 0.002 ETH or $5.30 per transfer compared to $29.92 on Jan. 10. Despite the low gas fee earlier on February 28, it should be noted that the level is still well above this time last year.
In addition, recently on February 15 noted a sharp fall in the use of natural gas, which has since recovered. However, it can provide an explanation for the fall in the price of natural gas, since these two indicators are proportional to each other.
While the drop in gas usage itself may be due to lower transaction costs, it may also be due to a drop in transactions themselves. The average number of Ether transactions has been falling since late November. Then, on Feb. 27, the Ether network made 1.12 million transactions.
One reason for this may be the continued decline in DeFi usage. The total value of DeFi smart contracts has fallen to $68.9 billion from $98.4 billion three months ago. This is due in large part to larger macro factors as well as the recent price declines experienced by most cryptocurrencies.
Source: DeFi Pulse
Yet another factor that may reduce gas usage and fees for Ether is the rise of alternative blockchains. At the time of writing, the cost of a token exchange on Ether is $8.75, while L2 zero-knowledge (zk) aggregation zkSync charges $0.22 for the same service.
In fact, zkSync 2.0 was recently launched on Ether's public test network and is touted as the first EVM-compatible zk rollup. It can also interact with smart contracts.