Ethereum, the largest altcoin seems to have done the overdue homework regarding its fee structure. Ethereum network fees plummeted in May, below $10 per transaction. Likewise, cheaper fees on layer one (L1) made layer two (L2) fees between $0.02 and $1.13 per transaction.
ETH: bottom
Santiment’s on-chain transaction fee metrics show that Ethereum transaction fees have been steadily decreasing since November 2021. Currently, the average ETH fee is only costing traders $2.54 per transaction. According to Santiment, tit is the lowest ETH cost level since July.
Ethereum’s shift to the Proof of Stake (PoS) consensus, indeed, played a vital part in the said decline. This shift is meant to hugely drop transaction fees by killing off all the parallel chains feeding off the crumbs.
Last year, the network began implementing Ethereum Improvement Proposal (EIP) 1559. This created a new system where transaction fees, once paid to miners, would be divided into base and tip to the minor. Now the miner receives the tip, but the base fee is burned or destroyed. Ergo, directly affecting the circulating supply.
Overall, taking one step closer to reaching the “deflationary” status. This might indeed fuel ETH’s prices given the growing adoption of the largest altcoin.
Notably, the on-chain data shows that Ethereum has seen a strong accumulation recently. The group of whale addresses holding between 10,000 and 100,000 ETH in their wallets increased their balance from 28.3 million ETH in March to 29 million ETH to date.
It means the whales purchased more than 700K ETH worth nearly $1.4 billion. These whale addresses currently hold nearly one-fourth of the total ETH supply.
Pull the trigger ?
Now the question is: what does this imply for the price given the fee structure? Historically, as can be seen on the chart, the price of Ethereum has increased every time the average gas fee has dropped below $5.
The above news may cause many in the crypto space to celebrate, especially those who hold ether.
For example, remember GameStop?
The video game retailer has unveiled a digital asset wallet for storing, sending and receiving crypto and NFTs ahead of the launch of its NFT Marketplace later this year. A beta version of the self-custodial Ethereum wallet is available on the GameStop website.
As a result, shares of GameStop, which trade on the New York Stock Exchange, rose 2.67% to $98.21 in premarket trading.
