Ethereum becomes inflationary as fees fall

The average Ethereum transaction fee fell to the 2023 low as NFTNFT sales declined, meme-token trading contracted, and Telegram bot activity waned.

According to Coin Metrics, the value stands at $2.24. The lower readings were last recorded in November-December 2022 after the collapse of FTX.

According to Etherscan, the base gas price does not exceed $0.60. However, NFT sales on the OpenSea marketplace would cost $2.05 in fees, and a swap on the Uniswap V3 protocol would cost $5.29.

The drop in network activity has led Ethereum (ETH) into an inflationary period — one of the few since the The Merge upgrade.

Since the transition to the Proof-of-Stake consensus algorithm, ETH issuance has fallen by more than 300 000 coins thanks to the burning mechanism of a portion of fees, according to Ultra Sound Money. However, over the last seven days 4131 ETH has entered the market.

Early in the year, coin burning volumes were supported by hype around the NFT platform Blur. In the second quarter, the fuel for the mechanism was provided by hype around meme tokens.

But in the past month there have been notable changes, namely that “the largest gas users were tied to DeFi, and the number of NFTs declined,” said Decrypt analyst Martin Li.

During this period, trading volumes of digital collectibles on Ethereum fell by 27%, according to Crypto Slam.

According to dashboards on Dune Analystics, after a brief spike in July-August, activity of leading Telegram trading bots such as Unibot and Banana Gun declined significantly.

As ForkLog explained in educational cards how Ethereum fees are formed and what affects transaction costs in the network.