Ethereum Gas Fees Plunge to $0.04 After Dencun Upgrade
Ethereum gas fees have fallen to record lows following the March 2024 Dencun upgrade. Basic transfers now cost just $0.04, token swaps $0.11 and NFT sales $0.19. This cost reduction coincides with a 20% increase in daily active addresses as Layer-2 rollups process nearly 99% of transactions.
The drop in Ethereum gas fees has boosted on-chain trading and smart contract activity. Lower fees make transactions more accessible for retail and institutional traders. However, base-layer fee revenue has plunged by 99%, sharply reducing validator rewards.
Experts warn that sustained revenue declines may threaten network security and validator incentives. Traders should watch for potential protocol adjustments aimed at balancing low costs with robust economic incentives.
Bullish
In the short term, the sharp drop in Ethereum gas fees reduces transaction costs, likely boosting trading volume and on-chain activity. This increased accessibility is positive for ETH demand as more users and institutional investors engage. Over the long term, however, the 99% plunge in base-layer fee revenue may undermine validator incentives and network security. If security risks materialize, confidence in Ethereum could wane. Overall, the net effect is bullish due to the immediate adoption surge, but traders should monitor potential protocol changes addressing fee distribution.