Ethereum Fees Hit Five-Year Low – What’s Behind the Drop?

Ecosystem English News Indices In Depth Learn Newsletters Crypto Bonus Research Podcasts About Stephen Katte Apr 17, 2025 Ethereum fees drop to a 5-year low as transaction volumes lull Fees on the Ethereum blockchain have dropped to the lowest level since 2020 thanks to fewer users sending Ether and using smart contracts, says Santiment. 3589 Total views 2 Total shares Listen to article 0:00 News COINTELEGRAPH IN YOUR SOCIAL FEEDTransaction costs on the Ethereum network have dropped to the lowest level in five years as the amount of activity on the blockchain is in a lull, according to the onchain analytics platform Santiment.Ethereum network fees are now around $0.168 per transaction and the reduction in fees coincides with fewer people sending Ether (ETH) and interacting with smart contracts, Santiment marketing director Brian Quinlivan said in an April 17 blog post.“When many people are using Ethereum, users bid higher fees to get their transactions confirmed faster This drives the average costs up,” Quinlivan said.“When fewer people are transacting, like we see now, users don’t need to bid much. As a result, the average fee drops,” he explained. “It’s essentially a supply and demand system.”Source: SantimentQuinlivan said that, from a trading perspective, low fees can preclude a price rebound, still, he added that traders appear to be patiently waiting for the global economic uncertainty to pass before scaling up their usual frequency of Ether and altcoin transactions.Traditional and crypto markets tanked after US President Trump’s sweeping tariffs were announced on April 2. Many assets haven’t recovered to the same level as before their unveiling, despite tariff exemptions and a 90-day pause for most countries.ETH has fallen over 12.5% in the past 14 days and has traded flat over the past 24 hours, hovering just under $1,600, according to CoinGecko.“We can visibly see the increased sensitivity toward Ethereum discussions and tariff/economy news as prices have really threatened long-time support levels,” Quinlivan said.“The more the retail community leans away from an asset, especially one with still thriving development, the higher the likelihood of an eventual surprise rebound with little resistance,” he added.  Pectra upgrade on the wayAfter delays due to configuration issues and an unknown attacker causing headaches during the Holesky and Sepolia testnet activations, the Pectra upgrade for the Ethereum network is now scheduled to go live on the mainnet on May 7.Phase one is expected to double the layer-2 blob capacity from three to six, reduce transaction fees and network congestion and allow fees to be paid in stablecoins like USDC (USDC) and DAI (DAI).Related: Ethereum devs prepare final Pectra test before mainnet launchThe maximum staking limit will also be increased from 32 ETH to 2,048 ETH.The second phase of Pectra is expected in late 2025 or early 2026 and will introduce a new data structure to enhance data storage efficiency and a system that improves scalability by enabling nodes to verify transaction data without storing the entire data set.The Pectra fork follows the network’s Dencun upgrade in March 2024, which slashed transaction fees for layer-2 networks and improved the economics of Ethereum rollups.Magazine: What are native rollups? Full guide to Ethereum’s latest innovation

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