Ethereum Gas Fees Hit Record Lows

The Ethereum gas fee has recently fallen to its five-year low, while the ETH price struggles to trade in the green. A recent report from Kaiko highlights the drop and its potential implications on the crypto's price.

Ethereum gas fees have hit a five-year low, according to a report by Kaiko. The drop in fees is due to several factors, including increased activity on Layer 2 solutions and the Dencun upgrade in March.

The Dencun upgrade introduced several innovations, such as “Blobs,” which have significantly reduced transaction fees for Layer 2 networks. For example, networks like Arbitrum, Base, and others can now publish their data on Ethereum at a fraction of the prior cost.

While lower gas fees may seem like a positive development for Ether users, there is a catch. The reduced fees mean that less ETH is burned during transactions, which in turn increases the overall supply of the cryptocurrency. Since April, the increase in supply has been consistent, sparking concerns about its impact on the crypto's price.

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