Recent data shows a significant drop in transactional fees on the Ethereum network, reaching a low not seen in seven months, with fees plummeting to $1.7 per transaction on May 12.
The decline in Ethereum’s average transaction fee to its lowest level in seven months coincides with the increasing competition from layer-2 networks, which are becoming more appealing for users requiring frequent transfers. BitInfoCharts data reveals that Ethereum’s average transaction fee dipped to $1.7, a level reminiscent of October 2023 when ETH was trading below the $2,000 mark.
This reduction in fees on Ethereum’s main network is mirrored on top layer-2 networks, thanks in part to the Ethereum’s Dencun upgrade. The fees on major layer-2 networks for token swaps have dropped below $0.5, marking a stark difference compared to the Ethereum mainnet, where users previously had to pay over $4 for the same transaction.
In response to the limitations posed by the existing gas pricing system, Ethereum co-founder Vitalik Buterin has proposed a solution through multidimensional gas pricing. Currently, Ethereum’s gas model measures all computing processes, including storage and data transfer, using a single metric. Buterin argues that this approach leads to inefficient utilization of computing power and may result in the inclusion of unsafe blocks in the blockchain.
By transitioning to a multidimensional gas model, Buterin suggests that the network could better reflect its constraints and capabilities, potentially increasing capacity without compromising resource fungibility. This proposal aligns with Ethereum’s ongoing efforts to enhance scalability and usability while maintaining decentralization and security.
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