Median Ethereum Gas Price Drops to 5-Year Low As Daily ETH Burn Rate Plunges

The median price for executing a transaction on the Ethereum blockchain has fallen to a 5-year low as the daily amount of ETH burned also took a plunge.

Ethereum’s median gas fees dropped to 1.9 gwei on Aug. 10, according to data from Dune Analytics. This is the lowest cost since mid 2019, and is also a 98% drop from the 83.1 gwei year-to-date high that was sent in March.

Layer-2 Networks Process Far More Transactions Than Base Ethereum Chain

Activity on layer-2 networks has been far more than that on the main Ethereum mainnet. Data from L2BEAT shows that Coinbase’s layer-2 chain, Base, processed over 109 million transactions throughout the past 30 days. This is substantially more than the 33 million transactions that the Ethereum mainnet facilitated during the same period.

The number of transactions on Ethereum also dropped more than 5% in the past week. In contrast, Base’s transaction count rose over 9% in the last 7 days.

Basefee right now at a multi year low of ~0.8 GWEI. 23.9 would be required to offset staking rewards. IMO Ethereum needs to get more L1 activity again and even if it sounds counterintuitive at such low rates, raising the gas limit can be part of a strategy. pic.twitter.com/RaTkzKOx1r

— Martin Köppelmann 🦉💳 (@koeppelmann) August 10, 2024

Gnosis co-founder Martin Köppelmann is concerned that the drop in Ethereum gas fees and the increased activity on layer-2 networks poses a threat to Ethereum staking rewards. In an Aug. 10 X post, he said that gas fees of at least 23.9 gwei are needed to fund staking rewards. He  added that Ethereum “needs to get more L1 activity again” 

Ethereum Daily Burn Amount Drops To 2024 Low

Along with the drop in gas fees, the daily amount of ETH burned on the Ethereum network has fallen to its lowest level for 2024 as well. Only 210 tokens were burned on Aug. 10. This is after the daily burn amount soared to 5,000 ETH on Aug. 5.

Over the past 24 hours, ETH’s price also took a knock. The largest altcoin by market cap fell more than 4% to trade at $2,551.56 as of 2:40 a.m. EST.

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