Ethereum Fees Drop 50%: Are Layers 2 Taking Over?

• Ethereum fees fell to their lowest point since October.
• There has also been a general decrease in L2 rates.

Ethereum [ETH] has long been known for its high transaction fees. However, there has recently been a change in this trend, with the average rate on the network seeing a significant decrease.

This decline raised the question of whether transaction volume on the platform has decreased or whether Layer 2 solutions are absorbing the associated fees.

Ethereum Average Fees Decrease

Recent data from Santiment indicated a decrease in Ethereum fees in recent weeks. As of April 28, average rates on the network had fallen to approximately $1.28, marking the lowest point since October 2023.

Subsequently, at the time of writing, the average rate had decreased further to around $1.02.

At the same time, there has been a reduction in the amount of ETH fees burned.

At the time of writing, chart analysis revealed that the burn rate has dropped to its lowest level in months, hovering around $355,000.

Comparatively, in March alone, the average fare exceeded $15, and burned fares totaled more than $35 million.

Additionally, AMBCrypto’s examination of the fee trend in Crypto Fees revealed a notable decline in Ethereum fees in recent weeks.

At press time, the network’s overall fee was approximately $3.3 million.

Comparing this figure with previous weeks, it was evident that rates had been reduced by half.

This corroborated the findings of the Santiment data, which suggested That such rate fluctuations generally correlate with market cycles, rising during price peaks and falling during market declines.

Additionally, the decline is often attributed to a decrease in network transactions.

Are L2s accepting Ethereum transactions and fees?

The most recent Ethereum update facilitated a reduction in fees on Layer 2 (L2) solutions, leading to an increase in transaction volume.

Examination of the number of L2 users revealed growth in recent months, currently exceeding 4 million users.

However, a detailed analysis by Grow the Pie indicated that the number of active addresses on major L2s is less than 2 million.

AMBCrypto analysis also showed a decrease in transaction count, which was around 6.3 million.

Additionally, an assessment of fees on L2 platforms revealed a significant decline over the past 30 days, with total fees amounting to less than $1 million.

This suggests that despite the growing number of users, the decline in active users and fees indicated a reduction in transactions.

The overall drop may pave the way for an increase once Ethereum price starts to rise.

ETH sees weak start to week

AMBCrypto analysis of Ethereum price chart indicated that it has largely remained within the $3,000 price range in recent days.

While it briefly touched the $4,000 mark in March, it has since retreated from that level. Additionally, there was a period in April where it fell below the $3,000 threshold.

Notably, a significant rally occurred at the end of the previous week, with a 3.93% increase that raised its price to around $3,253.

Although it maintained a positive trend on April 28, the increase was less pronounced, hovering around 1% and trading at approximately $3,262.

Read Ethereum [ETH] Price prediction 2024-25

However, at the time of writing, it has seen a drop of over 2%, trading at around $3,180.

Given the trend seen in fees, there are signs that traders are anticipating an upcoming price increase for Ethereum.

This is an automatic translation of our English version.