Experts warn that the drop in fees could hurt Ethereum’s revenue and weaken network security over time.
ETH traders and investors can now swap tokens, sell NFTs, or transfer assets for just a few cents after Ethereum gas fees dropped to 0.067 Gwei.
The main block explorer on Ethereum, Etherscan, shows that swapping tokens costs $0.11, selling an NFT costs $0.19, moving assets to another chain costs $0.04, and borrowing on Ethereum costs $0.09.
Ethereum traders take advantage of the lowest fees in history
The market crash in October drove Ethereum gas fees up to 15.9 Gwei. Trading became very expensive, and small investors stayed away from ETH activities because users had to pay high fees just to complete basic transactions.
However, gas fees dropped suddenly to 0.5 Gwei by October 12 and have since remained below 1 Gwei. Now, activity on ETH has increased significantly because both large and small traders are moving assets or experimenting with smart contracts without worrying about high fees.
Users can also complete multiple trades in a short period and manage complex blockchain transactions at a fraction of the usual cost.
Experts say low fees are not good for ETH’s money and security
The Ethereum Dencun upgrade in March 2024 led to a decrease in transaction fees on layer-2 networks, resulting in the main ETH network earning almost no revenue, as revenue decreased by nearly 99%.
Users had to pay higher fees for transactions on ETH, and the funds were used to compensate validators. However, many people are now migrating to the cheaper layer-2 networks, so the main Ethereum network is collecting very little money, which experts warn will not be enough to pay validators. And once validators leave or reduce their work because it is no longer profitable, the Ethereum network will become less secure.
Binance conducted research that showed that the main layer earns less money to improve the network or handle upgrades because layer-2 networks take fees away from it. For this reason, it becomes difficult to maintain system security because the main network must compete with its own layer-2 solutions.
Low fees also indicate that people prefer the fast and low-cost transactions of layer-2 networks. If this continues, the main network will have to strike a balance between making transactions affordable for users and maintaining the main layer’s security to compete with other blockchains.
Layer-2 networks have helped ETH reduce congestion on the main network, making the token more attractive for both new and experienced users. However, at the same time, they also reduce the revenue the main network generates. Experts suggest that the network needs to adjust its fee system, introduce incentives for validators, or increase base layer revenue without making transactions too expensive.
If ETH doesn’t find this balance soon, the network will most likely experience long-term risks even as short-term activity grows. Ultimately, the low fees will pose a significant challenge for the network in the future.
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