Calculated in small units of Ether called gwei, gas fees are payments paid by users to the Ethereum blockchain for the computer energy necessary to process and confirm transactions on the network. These gas fees are majorly influenced by transaction demand between miners and users of Ethereum. The demand for transactions can become so high that miners can opt to prioritize those who pay the most, which will in turn encourage users to pay more in exchange for the ability to have their transactions completed fast. Ethereum’s gas fees are known to be more expensive than those of other cryptocurrencies. This may be related to the increase in the price of ETH as well as the increase in the quantity of traffic on the network. The value of ETH is increasing, and transaction fees are becoming higher when compared with fiat. As more and more Ethereum decentralized applications are being adopted, the gas fees tend to go higher. For instance, the average gas fees were as high as $68 in May of last year, around the same time DeFi and NFTs gained a lot of popularity. As the demand for ETH increased with more people buying NFTs, the gas fees increased in tandem with the rise in the crypto price. Image from CoinMetrics showing the average and median price of ETH gas fees Why Did ETH Gas Fees Fall to the Lowest in Six Months? According to CoinMetrics data, ETH gas fees have been falling since the second week of January, recently reaching the ...
