Due to the recent reduction in DEX and DeFi size, Ethereum prices have dropped significantly after reaching a high. This high has been causing a lot of issues in the Ethereum community, making it difficult to make crucial decisions for investment in Ethereum. An increase in activity with DeFi protocols has also led to an increase in fee prices; the more Projects using DeFi, the more the fee will rise because the valuable resource will certainly be required to continue with the project.
According to charts from Etherscan, the Ethereum gas fee has seen a 65% drop, dipping to 131 Gwei. Data also shows that during certain periods, sometimes the fee drops to a low of 70 Gwei, but this rarely happens.
Information collected by Dune Analytics shows a fall in DEX trading volumes, displaying quite a significant change. As of now, a 24Hr growth measurement indicated that DEX’s growth has fallen by almost 50%, resulting in a decrease in the Ethereum gas fee. This may surprise a lot of people, but a data scientist named Connor Higgins from Flipside Crypto has stated that even with this fee dip, the high fee has started to become stable once again.
Data from Flipside Crypto also shows that the gas fee was still higher than a 2-day average, keeping in mind the increase in network congestion, which means that this drop in price isn’t actually something to go crazy over.
NFT transactions countering the fall
In comparison to the fall in Ethereum fee, if we take a closer look at the NFT (Non-Fungible Token) side, the number of EFT transactions and projects are increasing at a steady pace, meaning that there will be an obvious rise in transaction costs and network congestion, increasing the Ethereum gas fee in the system, practically proving that the recent dip will have no effect at all until and unless some sort of effective fee scaling method is used.
There are many other projects, like SushiSwap and Aavegotchi, that have been involved in getting worked with polygon to tackle the high fee of Ethereum. Polygon is a Layer 2 solution and protocol which have helped provide solutions for high Ethereum fee. Binance smart chain is also a solution and protocol that has helped to counter high Ethereum fee.