- Ethereum Gas Fees hit an eight-month low of about $1.83 on Etherscan, amounting to an average of 9 gwei for gas fees.
- ETH has assumed an inflationary trend, with the supply going up by 4,092 ETH tokens in the past week, which is worth $6.6 million.
- Ether on-chain activity increased in the first quarter of 2023 with the NFT frenzy caused by the first and second Blur token airdrop, which caused a spike in NFT trading volumes.
Ethereum Gas Fees have plummeted towards lows last experienced in 2022, registering an eight-month low. According to data from Coin Metrics, Ethereum transaction fees have decreased in the middle of reduced activity in meme coin trading, telegram bot subsides, and reduced NFT sale volumes.
As per Etherscan data, the average fee for Ethereum transfers is currently at $1.83, amounting to an average of 9 gwei for gas fees at the time of writing, while token exchange rates on Uniswap currently stand at $4.17, lows not experienced since the collapse of FTX in November last year.
As the demand for Ethereum gas reduces, Ethereum has assumed an inflationary trend; this amounts to one of the few such periods last seen in the merger in September 2022. As per Ultrasound.money data, Ethereum supply has gone up by 4,092 ETH tokens in the past week, which is worth $6.6 million, and in the past month, the total number of burned Ethers amounted to 63490 while those issued was 65548, registering a 2058 increase in new coins.
ETH traders await the next on-chain Story
In 2021, Ethereum activated the Ethereum Improvement Proposal(EIP-1559) burn mechanism, which made ETH transactions more efficient, with the gas fees for ETH issuance going down by 90% after its transition to proof of stake mechanism in 2022. ETH supply reached its highest in October 2022 and steadily fell to 120.43M in April.
Ethereum Burn rate since the Merge – Source: Ultrasound.money
Ethereum on-chain activity increased in the first quarter of 2023 with the NFT frenzy caused by the first and second Blur token airdrop, which caused a spike in NFT trading volumes. This saw a surge in the Ethereum prices. The burn rate increased even further in the second quarter with the meme coin craze.
Ethereum supply has ideally stabilized in the third quarter as the on-chain activity cools off, with a meagre increase recorded in September. According to Martin Lee, a Nansen analyst, the daily active addresses and transactions have been stable for the past year, with transactions ranging around 1 million and active addresses being around 400000.
Martin Lee added that one notable change in September is that more demand for the Ethereum Gas was from DeFi consumers other than NFT traders, who seem to have moved away.
The current ETH market performance
The second quarter has seen a decrease in the NFT trade sales volume. The number of unique NFT trading wallets has gone down more than three times in the span of a few years, according to data collected by Crypto Slam. The combined NFT trading volume has been down by about 70% since March, according to DappRadar, while transactions have reduced to 3.2M, registering a 45% drop. Spot trading volume on Dexes also dipped to low levels in August, according to the Block.
Source: Crypto Slam
According to Whale Hunter, data analyst Dune, the recent brief activity from Telegram trading bots such as Banana Gun in the third quarter also seems to have cooled off. MEV Bot, for instance, became ETH’s top gas spender in 2023 amid the passive performance of other on-chain actors.
Jared From Subway, who operated the most effective MEV bots, was reported to have paid more than $70 million in gas fees since February 2023. According to statistics, MEV bots might contribute to about 85% of top DEXse trading volumes during these low market performances.
With the drop in on-chain activity, on-chain actors are waiting for the next narrative as the hype cools. This has seen the supply of ETH increase as gas fees plummet. ETH burn rate has accelerated in the first and second quarters in response to on-chain activities such as the Blur airdrops and the meme coin hype.
As recorded on Binance, the live price of ETH stands at $ 1,628.30, with a current market cap of $ 195.75B at the time of publication. Ether has a circulating supply of 120.22M.
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