Transaction costs within the Ethereum ecosystem have dropped to the lowest point in the past two years, according to data from a key on-chain metric. Interestingly, the transaction count, new user count, and even layer-2 transaction volumes continued to move higher during the period.
The data from the on-chain metric shows that the costs started dropping since the NFT boom in 2021. The news brings a whiff of relief amid the fee-reduction concerns that surrounded the era-defining Ethereum Merge. While some initially believed that transition to the PoS ecosystem would lower transaction costs, Ethereum Foundation stated otherwise. Now that the transaction costs have gone down organically, it is clear that users aren’t feeling the urge to pay higher in order to get their transactions through.
Why did the transaction costs drop?
To be sure, the Merge has nothing to do with the drop in fees. The reduced costs can be attributed to the drop in NFT buying activity, especially across the OpenSea marketplace. If you are keen on specifics, do note that OpenSea NFT transactions consumed 1,100 ETH over the past 30 days, which is well below its standard monthly average of 16,400 ETH.
Another reason for the drop in transaction costs is the growth of dependable layer-2 platforms like Polygon, Optimism, and Arbitrum. Last of all, users migrating to other chains for more affordable transactions have also contributed to Ethereum’s growing affordability. However, offsetting this slow outflow is the steady inflow post-Merge.