Cryptocurry enthusiasts may be happy to see their favourite tokens become mainstream thanks to the Crypto-Bowl. Ethereum enthusiasts have another reason to celebrate, since trading ETH is now more affordable than it has been in months.
According to L2Fees data, this phenomenon also extends to L2 solutions. Nearly all the most popular L2 solutions cost less than $1 to send Ethereum and $0.31 to $2.18 to swap tokens. This is a more complicated operation.
Ethereum is becoming cheaper
Ethereum is a type of Swiss-Army blockchain. This network is home to many innovative products, including big dApps and decentralized exchanges.
However, everything comes with a cost. All this popularity has caused Ethereum’s fees to soar, making adoption difficult in the short term. It also gave rise to many competing blockchains and scalability project.
However, things are changing. Bitinfocharts figures show that the average transaction fee for Ethereum blockchain has reached $15.31. This is a new record since October 2021 when fees were at a low of $13.
Average Ethereum Fees Image: Bitinfocharts
This is a significant decrease in average fees price from November 2021, when transactions cost more than $62.8.
The average transfer fee was $6.67. This is a significant improvement for ETH users who only need to make simple payments or transactions.
Why fees matter
The sustainability of Ethereum and any other blockchain is dependent on the fee issue. Users who conduct transactions on Ethereum, and all proof-of-work blockchains have to compete in a bidding process to get their operations done more quickly.
Simply put, the quicker your transaction is confirmed, the higher the fees you pay to miners. Ethereum, however, isn’t just used for wealth transfer, but it is also a Turing-complete Blockchain, which means that it can run complex decentralized applications.
The transaction will run faster if it is more complex. It is not unusual to charge fees for complex token swaps, especially when the trade is quick and can make the difference between a profit and a loss. This includes legitimate arbitration, exploiting bugs for questionable purposes, or even legitimate arbitration.
According to Vitalik Buterin, the ultimate solution is the new Ethereum Consensus layer, formerly known ETH2.0. It seeks to be proof of stake and introduce scalability solutions like sharding. This could potentially increase transaction processing capacity to close to 100,000 transactions per minute.
The road ahead is not easy and many people are skeptical. The best solutions are to use L2 solutions such as Polygon and Loopring, where sending tokens is less expensive than $1, or to turn to competing blockchains such as Solana or BSC.
Marla Brooks – Financial Analysis
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