Due to Decrease in trading volume, Ethereum fee at lowest in 5 years

Ethereum network fees at the lowest level in 5 years (Source: Santiment)

The average transaction fee of the Ethereum network has dropped to the lowest level in 5 years. On-chain data analysis company Santiment announced that the current average fee of Ethereum is 0.168 dollars. This is the lowest since 2020, as the overall transaction volume decreased, increasing pressure for fee reduction.

Director Brian Quinlivan of Santiment explained, "Fees are basically determined by the balance of supply and demand," adding, "In the current situation where trading activity has contracted, users can trade with even lower fees."

Quinlivan analyzed that while this low-fee environment may suppress price rebound in the short term, the possibility of a long-term rebound remains open as market participants await the resolution of global economic uncertainties. Ethereum has recently declined by more than 12.5% over two weeks after the announcement of President Trump's tariff policy and is currently hovering below 1,600 dollars.

Particularly, Quinlivan noted that the Ethereum community is responding sensitively to economic news, stating, "While development continues, as individual investors reduce their interest, the possibility of an unexpected rebound may actually increase."

Meanwhile, Ethereum's major scalability upgrade 'Pectra' is scheduled to be applied to the mainnet on the 7th of next month. This upgrade, which was postponed due to issues in multiple testnets, is evaluated as a key step in the scalability roadmap following Dencun.

In Phase 1 of Pectra, the processing capacity for blob data will be doubled, and fees can be paid with stablecoins like USDC and DAI. Additionally, the staking cap will be greatly increased from 32 ETH to 2,048 ETH, significantly changing the network participation structure.

The subsequent Phase 2 is expected to be applied between late 2025 and early 2026, introducing a new structure that improves data storage efficiency and enhances node scalability. This is expected to simplify transaction verification and reduce network burden further.

As fees have recently decreased along with the announcement of a large-scale upgrade, market attention is focused on whether Ethereum can seize an opportunity for a rebound.