The gas fee delle transazioni crypto sulla blockchain di Ethereum (ETH) sono scese ai minimi del 2024.
According to the data from EtherScan, for several days the minimum gas has been below 1 Gwei, with peaks below 0.6 Gwei.
For example, at the peak moment of the year, in March, the minimum gas price almost reached 50 Gwei, while the average was above 98 Gwei.
Recently, however, the average has fluctuated between 3 and 9 Gwei, with a peak of 51 on August 5.
Historical lows for gas fees on crypto transactions on Ethereum (ETH)
Analyzing instead the cost in dollars, the median of the fees per transaction on the Ethereum blockchain has dropped to $0.3, after being above $3 on August 5th.
From this point of view, the peak maximum of 2024, always regarding the median, touched 13.5$ in March, and practically had never been below 0.5$ before.
To return to figures as low as the current ones, it is necessary to go back to October 2022, the year of the last bear-market, just before the bottom was reached with the collapse of FTX.
The reason for this decline is quickly explained: a sharp reduction in the number of daily on-chain transactions on layer-1.
We have moved from 1.3 million transactions in June to the current 985,000, a level so low that it hasn’t been seen since mid-February. At that time, however, the price of ETH was higher, and so with the same fees, the cost in dollars was higher.
It should be noted, however, that in 2023 daily on-chain transactions on layer-1 of Ethereum reached much lower peaks, with minimum peaks even at 860,000.
So there was not a real collapse in the number of transactions, but a collapse in fees, partly due to a reduction in the price of ETH in August, partly due to the Dencun update in March.
The reduction of the burn
The reduction of fees has also inevitably generated a strong reduction in the ETH burn rate.
In fact, a portion of the ETH used to pay the fees is burned, but the fewer fees are paid, the fewer ETH are burned.
This has led to an increase in the circulating supply.
A year ago the ETH in circulation were 120 million and 270,000.
Thanks to the large volumes of fees paid by users, the burns had allowed the circulating supply to be reduced to 120 million and 65,000 in April.
Then, however, there was a trend reversal, and from deflationary ETH returned to being slightly inflationary.
Now the circulating supply of Ethereum has returned exactly to the level of a year ago, that is 120 million and 270,000, so in the last 12 months, the inflation of its monetary mass has effectively been reset.
Note that two years ago it was 120 million and 217,000, so in the last two years it has been slightly inflationary, while in August 2022 it was 120 million and 33,000.
The turning point from this perspective occurred in 2021, when the London update was introduced. Three years ago the circulating supply of ETH was indeed 117 million and 257,000.
The return to inflation
Last Saturday, for example, only 210 ETH were burned, while the net issuance of ETH through staking rewards exceeded 2,000 ETH.
Therefore, the recent sharp reduction in fees is bringing Ethereum back to being a currency with an inflationary money supply.
Although it is almost certain that the current levels of fee so low will not last forever, it is not possible to know neither when they will rise again nor by how much they will rise.
In the purely hypothetical case in which the current situation persists for twelve months, with a net daily production of about 1,800 ETH in a year the circulating supply of Ethereum could increase by about 650.00 ETH, or more than 5%.
This is a purely theoretical case, because it seems practically impossible that the current situation could persist for so long.
For example, currently, 450 BTC are created every day, for a total of about 160,000 new Bitcoin per year. With a circulating supply of 19.7 million BTC, the current annual inflation of Bitcoin’s monetary mass is less than 1%. In the case of Bitcoin, however, it is already known that until block number 1,050,000 nothing will change from this point of view: always 3.125 new BTC per block.
Ethereum, on the other hand, has an unpredictable monetary mass inflation, although in the long run it tends to be deflationary.
