On Wednesday the Ethereum Foundation clarified that The Merge will not reduce onchain fees as the highly anticipated transition from proof-of-work (PoW) to proof-of-stake (PoW) is now 29 days away. Amid The Merge update from the Ethereum Foundation, during the last month, Ethereum network costs have printed some of the lowest onchain fees since 2020.
The Ethereum Foundation clarifies that ‘gas charges are a product of network demand’ – the merge does not significantly change any parameters that directly affect network capacity or throughput
The Ethereum Foundation wants the public to know that the merge will switch from PoW to PoS, but the assumption is false that fees will drop. The statement was added to the definition of the foundation and the summary of the merge hosted on Ethereum.org.
The page has been updated on a few occasions and the last update occurred on August 16, 2022. Ethereum developers are expected to convene for a meeting on August 18, 2022.
“Gas charges are a product of network demand relative to network capacity,” the website’s newly updated summary states. “The merge reduces the use of proof-of-work, converting proof-of-stake for consensus, but does not significantly change any parameters that directly affect network capacity or throughput.”
While transaction fees on Ethereum will not change after The Merge, users who want lower fees will have to leverage layer two (L2) scaling solutions and wait for more Ethereum upgrades. Following The Merge, Ethereum will implement The Surge, The Verge, The Purge, and finally The Splurge.
Surge aims to help improve scaling by leveraging zero-knowledge rollups (ZK-rollups) through sharding techniques. Ethereum’s The Verge Transition will implement Verkle Tree to achieve statelessness using Merkle Proof Upgrade. Even though the fees will not be reduced immediately, Ethereum’s OnChain fees have been at their lowest rates since 2020.
At the time of writing on August 17, bitinfocharts.com statistics show the average network fee today is 0.0012 ether or $2.28 per transfer. Etherscan.io’s Gas Tracker is even lower showing a high fee is around 22 gwei or $0.85 per transaction.
An OpenC Marketplace sale is $2.90, a Uniswap swap is $7.47, and an ERC20 transfer such as Tether (USDT) is $2.19 per transfer as of Wednesday. L2 fees are lowest on Looping and Zksync as the cost to send Ether can range between $0.04 to $0.06.
