Ethereum Network"s Rising Gas Fees in 2023: A Balancing Act of Growth and Cost
Ethereum gas fees have increased 13.71% in the last two weeks, with the average fee rising from $4.52 per transaction to $5.14 per transfer on Feb. 3, 2023. Despite ethereum’s price seeing significant growth this year, its network’s gas fees have also seen a similar increase. As the demand for Ethereum’s capabilities continues to soar, it remains to be seen if these rising fees will ultimately hinder its growth. Ethereum Gas Fees Continue to Increase
With a value of $1,701 per coin reached on Thursday, Feb. 2, 2023, ethereum (ETH) has reached new heights, soaring to its highest value this year. However, despite the increase in ethereum’s token value, the cost to send the cryptocurrency onchain has also risen.
On Jan. 18, 2023, data from bitinfocharts.com showed an average transfer fee of 0.0029 ETH or $4.52 per transaction. Just 15 days later, the transfer fee had risen to 0.0031 ETH or $5.14 per transaction.
The median fee for transactions was around $1.96 per transaction on Jan. 18, 2023, and jumped 20% to $2.36 per transaction on Feb. 3, 2023. The median fee to transfer ether is now 0.0014 ETH.
Transacting on Opensea currently costs around $3.89, while a decentralized exchange (dex) swap costs around $10.02 per transaction. On the Ethereum network, the cost to transact with an ERC20 token such as USDT or USDC is around $2.94 per transfer on Feb. 3. Exploring L2 Alternatives: Ethereum Transactions vs. Optimism and Arbitrum Networks
According to Dune Analytics data, the average cost to send transactions using the Ethereum scaling solution Optimism is approximately $0.288 per transaction, while the L2 scaling network Arbitrum is around $0.182 per transfer on Feb. 3.
The combined number of L2 transactions using Arbitrum and Optimism has decreased since Jan. 15, 2023. Two days ago, on Feb. 1, 2023, Ethereum recorded 1.06 million transactions, while the combined number of transactions using Arbitrum and Optimism was 902,254.
Data shows that the cost to transfer 1.06 million transactions on Ethereum at a median rate of $2.36 per transaction would be $2.49 million. However, if these same transactions were moved to Optimism at a rate of $0.288 per transaction, the fees would cost $307,680, which is 87.67% lower.
If the transactions were moved to Arbitrum at a fee rate of $0.182 per transfer, the cost would be $193,720, a 92.19% decrease compared to Ethereum. While Ethereum recorded 1.06 million transactions with a much higher cost, Optimism had 212,743 transfers and Arbitrum had 689,511 transactions. Tags in this story 1.06 million transactions, 212743 transfers, 689511 transactions, 87.67% lower, 92.19% decrease, Arbitrum, Average Fee, Bitinfocharts.com, cost to transfer, Cryptocurrency, decentralized exchange, Demand, dex swap, Dune Analytics, Dune Analytics data, ERC20 token, ETH, ETH fees, Ether fees, Ethereum, Ethereum (ETH), Ethereum cost, Ethereum Network, Ethereum scaling solution, Fees, gas fees, growth, hindrance, increase, L2 scaling network, Median Fee, number of transactions, onchain cost, Opensea, Optimism, Token value, transaction cost, transactions, transfer, transfer cost, transfer fee, USDC, USDT
What are your thoughts on the rise of Ethereum gas fees and the potential impact on its growth? Let us know your thoughts about this subject in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. DOJ-Appointed US Trustee Objects to Subpoena Request in FTX Bankruptcy Case NEWS | 5 hours ago Addressable Raises $7.5 Million to Help Web3 Marketers Reach Their Audiences NEWS | 12 hours ago
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