According to Santiment, Ethereum’s average transaction fees have dropped to a mere $1.63, reaching a level that has historically encouraged increased trading activity. As Ethereum approaches its 10th anniversary, this fee reduction could once again influence traders to make more frequent transfers.
This is a pattern observed in the past when fees were this low. The lower fees provide some relief to users whose high transaction costs have often been deterred during periods of congestion on the network.
Ethereum’s Price Actions
Despite the drop in fees, Ethereum’s price has slipped by 1.27% over the last 24 hours, currently trading at $2,612. The overall market capitalization for Ethereum stands at $314.51 billion, also down by 1.23%.
Adding to this bearish sentiment, Ethereum’s 24-hour trading volume has declined by 18.45%, indicating reduced market activity during this period of falling prices and fees.
Simultaneously, Scroll, a new Ethereum layer-2 network, has sparked market interest by airdropping its governance token, SCR. Blob fees, which is a particular kind of Ethereum transaction fee, rose sharply as a result of the October 22 airdrop, driving prices up to $4.52. Since Ethereum’s Dencun upgrade in March, blob fees have increased three times.
As users rushed to collect their tokens, Scroll’s token airdrop caused a notable spike in network traffic, which raised costs for some transactions. Hildobby, a pseudonymous crypto data analyst, wrote on X (Twitter) that the airdrop was the direct cause of the rising demand for blob transactions, stating, “Scroll airdrop claimers just triggered the blob market, they’re no longer free.”
Vitalik Warns Against Blob Fees
Only a month has passed since Vitalik Buterin, a co-founder of Ethereum, issued a warning against the growing usage of blobs on the network. Buterin highlighted in a conversation on X on September 27 that the “blob count”—the most blobs that can be processed in a block—was getting close to capacity.
He warned that Ethereum’s scalability would be jeopardised without the required enhancements, which could result in possible transaction speed slowdowns and network congestion.
Vitalik’s Take on Ethereum’s Future
In a blog post published on October 14, Buterin also discussed his opinions on Ethereum’s overall development. He listed several potential areas for significant blockchain development, including accelerating transactions, strengthening security, and expanding access for lone stakers.
These thoughts follow the Ethereum Merge, which drastically reduced Ethereum’s energy usage and created opportunities for future scaling solutions by switching the network from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism.
As Ethereum continues to evolve, both users and developers are keen to see how these advancements will unfold. The reduction in transaction fees may encourage more frequent transfers in the short term, while longer-term challenges, such as scaling and optimizing the network’s capacity to handle growing demand, remain critical areas of focus for Ethereum’s development team.