After a particularly active May, lower Ethereum gas fees are a welcomed respite.
Compared with other proof-of-stake blockchains, Ethereum gas fees can be exorbitantly high. The good news is that this week, gas fees (i.e. transaction fees) have decreased from an average of $20 in May down to $7.34 this week.
Data from Dune Analytics shows that the median gas price, measured in gwei (one-billionth of one ETH), has also exhibited a downward trend. After peaking at 142 gwei last month, the median price now stands at a modest 24 gwei.
The drop can be attributed to the conclusion of the memecoin frenzy and a decrease in maximal extractable value (MEV) bot activities.
So-called memecoin mania brought about an unexpected shift in the ranking of the top 10 gas-consuming altcoins. Instead of the customary dominance of Ether (ETH), Tether (USDT), or Wrapped Ether (WETH), memecoins like Troll (TROLL), APED, and BOBO took the spotlight as the primary gas consumers.
Maintaining low transaction fees is essential for mainstream adoption of the Ethereum network. As Santiment, a market intelligence platform with on-chain metrics puts it, “more affordability encourages more utility”.
Ethereum is now trading relatively flat at roughly $1,830, but Ethereum-based NFTs have responded well to the drop in gas price. Data from OpenSea shows that Bored Ape Yacht Club has seen a 78% increase in volume over the past seven days, and Azuki has increased by 160%.
These increases are likely bolstered by Blend – a new NFT perpetual lending protocol that matches users looking to borrow against their NFTs with lenders offering the most competitive rates.
Despite being met with criticism upon launching, the Blend protocol already claims an 82% share in the NFT lending market, just 22 days after launch. Since May 1, Blend has accumulated 169,900 ETH (approximately $308 million) in trading volume, with the lending protocol now representing 46.2% of the platforms total trading volume.
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