Ethereum’s transaction costs have plunged to their lowest level in years, falling to just 0.067 Gwei on Sunday. While this drop offers short-term relief for traders and decentralized finance (DeFi) users, analysts warn that it could signal deeper structural challenges for the network’s long-term sustainability.
Ultra-Low Fees Delight Users
According to data from Etherscan, executing a basic transaction on Ethereum now costs only a few cents. The average swap costs around $0.11, an NFT sale costs $0.19, bridging assets to another blockchain is $0.04, and borrowing onchain costs around $0.09.
For users accustomed to paying tens of dollars in transaction fees during times of network congestion, the change is significant. The decline in fees follows a slowdown in overall crypto market activity after October’s sharp market correction, which erased billions in capitalization across major tokens.
Ethereum’s layer-1 gas prices have been trending downward since the flash crash on October 10, when fees briefly spiked to 15.9 Gwei. By October 12, fees had already dropped below 0.5 Gwei, remaining under 1 Gwei through October and into November.
A Double-Edged Sword for Ethereum
While traders welcome these cheaper transaction costs, experts caution that the decline may not be entirely positive. Low fees often indicate a reduction in onchain activity and network demand — both crucial drivers of Ethereum’s revenue.
During the 2021 bull market, transaction fees occasionally exceeded $150 per transaction as users competed for limited block space. These fees became a key source of income for Ethereum validators, especially after the network transitioned to a proof-of-stake consensus model.
Now, however, that income stream has diminished sharply. Data from Token Terminal shows Ethereum’s layer-1 fee revenue has fallen by 99% since 2024, reflecting the impact of lower transaction demand and the growing dominance of layer-2 solutions.
Impact of the Dencun Upgrade
A major factor behind the fee decline is the Dencun upgrade, implemented in March 2024, which dramatically reduced transaction costs for Ethereum’s layer-2 scaling networks like Arbitrum, Optimism, and Base.
While this upgrade succeeded in making Ethereum more accessible and scalable, it also diverted much of the fee revenue away from the main layer. As a result, Ethereum’s base layer now processes fewer high-value transactions, raising concerns about validator incentives and overall network security.
According to researchers at Binance, Ethereum’s scaling model represents a trade-off. Layer-2 networks enhance throughput and efficiency, but they also cannibalize the base layer’s economic activity. Over time, this dynamic could create competition between Ethereum’s core network and its own ecosystem of scaling solutions.
Potential Risks to Network Security
Analysts warn that persistently low gas fees could have long-term implications for the health of the Ethereum network. Since validators are rewarded partly through transaction fees, a sustained drop in fee revenue might reduce their incentive to secure the network.
Although staking rewards and issuance of ETH still provide income to validators, the shrinking share of fees means the network’s economic security model relies more heavily on inflationary rewards rather than organic user activity.
Additionally, if network demand continues to decline, it could suggest that users are migrating to alternative blockchains offering faster and cheaper transactions, such as Solana, Avalanche, or Polygon.
Market Outlook: Opportunity or Warning Sign?
For traders and DeFi users, the current environment presents a golden opportunity. Low gas prices mean more efficient trading, cheaper NFT interactions, and reduced costs for smart contract deployment.
However, market observers say the current lull is also a reflection of a broader slowdown in crypto activity. Many investors remain cautious following October’s historic crash, which saw several altcoins lose over 90% of their value in just 24 hours.
Still, optimism persists among Ethereum developers. They view the recent lull as a temporary phase before the next wave of network upgrades and onchain innovation. Upcoming improvements to Ethereum’s sharding architecture and data availability layers could further reduce congestion while enhancing the network’s overall economic structure.
Conclusion
Ethereum’s gas fees dropping to 0.067 Gwei highlights both progress and potential risks. While cheaper transactions improve user accessibility, they also underscore deeper challenges in Ethereum’s revenue generation and long-term sustainability.
As the network continues evolving toward a multi-layered architecture, Ethereum must balance scalability with economic security. Whether these historically low fees represent a temporary pause or a sign of structural change remains to be seen — but one thing is clear: Ethereum’s future depends on maintaining both affordability and resilience in an increasingly competitive blockchain landscape.
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