Gas Fees on Ethereum Network Soar to Multi-Month High with Surge in Transaction Volume
Gas fees on the Ethereum network have reached a multi-month high following a substantial increase in transaction volume. This surge in activity has caused concern among Ethereum users as the price of ether decreased by almost 2% over the past 24 hours.
Since the beginning of February, Ethereum transaction volume has been on the rise, resulting in network gas fees skyrocketing to a multi-month high. Recent data shows that the seven-day moving average for economic throughput on the Ethereum blockchain has surpassed $3.55 billion, representing a significant 15% increase from the seven-day average of $3.08 billion recorded at the start of the month.
This increase in transaction volume over the past few weeks has driven the Ethereum network gas fees to spike. The seven-day moving average for this metric has surged to over $11, a level not witnessed since mid-December 2023.
The most significant spike in gas fees occurred on Feb. 9, with total Ethereum network gas fees amounting to 854 ether. The recent surge in gas prices can be attributed to various factors.
One contributing factor is the surge in non-fungible tokens (NFTs) traded on the Ethereum network. NFT trading volume in Ethereum has reached its highest level since late February last year, with the current weekly volume standing at its highest since the week of Feb. 26, 2023. In the past week alone, Ethereum NFT trading volume hit a multi-month high of $147.29 million.
In response to the mounting concerns, Ethereum developers and users are exploring measures to tackle the growing gas fees. One potential solution involves the implementation of Ethereum Improvement Proposal (EIP) 1559, which could help optimize transaction fees.
At 5:30 a.m. ET, the price of ether saw a 1.9% decrease, falling to $2,476. As the Ethereum community grapples with these escalating gas fees, the industry is eagerly watching to see if any solutions emerge to address this pressing issue.
Analyst comment
Positive news: There is a surge in transaction volume on the Ethereum network, leading to a multi-month high in gas fees. Ethereum developers and users are actively exploring solutions, such as implementing EIP 1559, to tackle the growing gas fees.
Analyst’s prediction: The market may experience increased volatility as Ethereum users seek solutions to address the rising gas fees. If successful, the implementation of EIP 1559 could optimize transaction fees and potentially stabilize the market.
