Ethereum gas prices have reached a historic low, dropping below 3 gwei for the first time since January 2020. This significant decrease in gas fees can be attributed to the Dencun upgrade, which was implemented on March 13. The upgrade introduced EIP-4844, which reduced Layer 2 transaction costs by over 90%, easing the strain on the Ethereum mainnet.
Currently, the Ethereum gas price stands at around 3.13 gwei, according to a Dune Analytics dashboard. This is a substantial drop compared to a year ago when the median gas price was around 18 gwei, six times higher than the current rate. The highest gas price recorded in 2024 was 83 gwei on March 5.
While the decrease in gas prices has been a positive outcome of the Dencun upgrade, it has also had an unintended consequence. The upgrade has increased the supply of Ether significantly, challenging Ethereum’s deflationary narrative. According to Ultra Sound Money, Ethereum’s supply has grown by 120,172,371 ETH, impacting the price of ETH.
It is important to note that the information provided in this article is for general market commentary and should not be considered as investment advice. Conducting your own research before making any investment decisions is highly encouraged.