Yesterday, Ethereum's daily mean gas price reached a new all-time low of only 2.9 Gwei.
Ethereum's daily mean fees, denominated in USD, also hit a new multi-year low of just $0.85.
As a result, Ethereum's daily mean burn rate fell to its lowest level ever, with only 115 ETH burned yesterday.
Despite the sharp decline in Ethereum gas prices and the burning rate, Ethereum's daily mean transactions have been flat or have seen a decent rise compared to the same period over the last two years.
So, this dramatic fall is likely related to the Dencun upgrade activated on Ethereum on March 13 of this year. The upgrade introduced 'Blobs,' a new type of transaction that allows Layer 2 networks like Arbitrum, Base, Optimism, and others to publish their data on Ethereum with a significant reduction in fees, potentially up to 100%.
While low fees are beneficial for users, they might not be advantageous for investors, especially given the substantial portion of Ethereum's usage that is being offloaded to its Layer 2 networks, and the potential problems this could cause, such as user and liquidity fragmentation.
Despite the approval of Ethereum ETFs, the price of ETH has been struggling since the Dencun upgrade. ETH supply has increased by more than 197,000 ETH (+$500M), and its price has fallen by 35%.
Written by EgyHash
