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Expert Insights: Low Ethereum Gas Fees Are Beneficial, But Not for Everyone

Sead Fadilpašić
Last updated: | 21 min read
Ethereum gas fees

Key takeaways:

  • The Ethereum fee decrease was caused by the Dencun upgrade, the surge in Layer 2 solutions, and the latest shift in the crypto market.
  • Most experts agree that low Ethereum fees can last, but changes in regulations and market conditions will define their future.
  • Lower gas fees enhance accessibility for users and developers, potentially increasing Ethereum’s network activity and demand for Ether.
  • Concerns exist about the impact of low fees on Ethereum’s deflationary mechanism and the potential consolidation of power by larger entities, which could affect the network’s decentralized nature.
  • Lower fees may increase security risks like spam and poisoning attacks, but Ethereum’s continuous enhancements and active community are expected to protect the network.

The gas fees on Ethereum, the world’s second-largest blockchain by market cap, fell significantly following its recent massive upgrade. Cryptonews spoke with experts about the key factors contributing to the fee decrease, how sustainable the trend is, and its impact on users, the ETH price, DeFi, and NFTs.

The overall verdict is that the changes are mostly positive, but there are some potential downsides and security issues to keep an eye out for.

Here are the industry experts who contributed to this research:

  • Peter Eberle, President and CIO of Castle Funds, an investment firm managing funds invested in Bitcoin and other digital currencies since 2017;
  • Stepan Nilov, Consultant at BlocksBridge, a research and communications firm for the cryptocurrency industry;
  • Ryan Lee, Chief Analyst at Bitget Research, an arm of crypto exchange Bitget;
  • Garry Kabankin, Leading Market Analyst at blockchain analytics platform Santiment;
  • Edward Wilson, Social Media Lead & Member of blockchain analytics platform Nansen’s trend spotting division;
  • Stijn Paumen, Founder and CEO of Web3 payments platform Helio;
  • Patrick Gruhn, founder of, a MIFID II Market Infrastructure startup for crypto derivatives trading;
  • Vijay Marolia, the Managing Partner and Chief Investment Officer of multi-strategy investment firm Regal Point Capital;
  • Gabriella Kusz, the COO of TCS blockchain, who served as a Board Director at the Global Digital Asset and Cryptocurrency Association;
  • Alex Dulub, Founder of security browser extension Web3 Antivirus.

Read their insightful opinions below.

Why Ethereum Gas Fees Dropped

Following the Dencun upgrade, charts showed the Ethereum gas fee drastically dropping, as was expected.

CryptoQuant found that the upgrade caused the median transaction fee and the total fees burned to plummet – despite high network activity.


The average transaction fees peaked at nearly $200 in May 2022, per BitInfoCharts. It would occasionally fall below $2 throughout April and May, compared to the whopping $30 in March.

According to the charts, the average transaction fee has hovered between $2 and $7.8 over the past week, levels also seen before the upgrade.

Ethereum Average Transaction Fee (USD), Raw Values


The median transaction fee fell below $1 in mid-May after climbing to $13.5 in mid-March and now fluctuates between $2 and $3—similar to levels observed before the upgrade.

Ethereum Median Transaction Fee (USD), Raw Values


The experts speaking to Cryptonews have noted several key factors contributing to this decrease, including the recent Ethereum upgrade, the surge in the number and popularity of Layer 2 solutions, and the latest shift in the crypto market.

Garry Kabankin, Leading Market Analyst at Santiment, told Cryptonews:

“Historically, Ethereum gas prices are influenced by network congestion, which is directly tied to the number of transactions being processed on the blockchain. The drop you’re observing could be attributed to several factors, including improvements in network efficiency or a temporary decrease in transaction volume.”

Dencun Upgrade founder Patrick Gruhn argued that the fees are a result of a combination of factors, especially the Dencun upgrade (or Cancun-Deneb, EIP-4844) and the fact that activity has moved from the Ethereum blockchain (Layer 1) to Layer 2 solutions or other blockchains like Solana.

Gabriella Kusz, the COO of TCS, also mentioned the recent Dencun upgrade, as it was set in part to help support further scalability of the second-largest blockchain.

ETH gas prices peaked in early March 2024, right before the Dencun upgrade was implemented, explained Peter Eberle, President and CIO of Castle Funds. This upgrade reduced the amount of data storage needed by Ethereum, which in turn lowered gas costs.

Stijn Paumen, Founder and CEO of the Web3 payments platform Helio, commented that by separating data from the mainnet and Layer 2, Dencun has significantly reduced congestion and paved the way for a more scalable and accessible Ethereum.

Layer 2 surge

Another correlated factor, which has been notably amplified by Dencun, is the Layer 2 chains.

According to Stepan Nilov, a consultant at the research and communications firm BlocksBridge, the growing dominance of L2 blockchains like Base, Blast, Arbitrum, and others is the main factor contributing to the drop in Ethereum gas fees.

“We see a lot of on-chain activity shifting there,” Nilov said. This shift is amplified by Dencun, which introduced ‘blob transactions,’ slashing gas fees on Ethereum L2s by up to 99%.

Before that, a swap on an L2 chain could cost up to several dollars, he explained. While it was a much smaller fee than on Ethereum at the time, it was nonetheless “not low enough to not take these fees into consideration for users.”

Patrick Gruhn explained that the gas price on the Ethereum base layer depends on the number of transactions. Therefore, moving to Layer 2 solutions reduces the activity and the gas fees.

Gruhn, too, finds that Dencun has helped Layer 2 settle transactions on Ethereum much more efficiently. It decreased the fees associated with Layer 2 solutions and decongested the Layer 1 network from clunky batch settlements.

Santiment’s Kabankin, in a conversation with Cryptonews, added that the introduction of Layer 2 scaling solutions and the increasing adoption of alternative networks for activities like trading NFTs or DeFi operations could reduce the strain on the main Ethereum network, thereby lowering gas prices.

Stijn Paumen also confirmed that the growing popularity of alternative blockchains like Solana is resulting in less congestion on-chain. Additionally, greater numbers of Web3 natives are utilizing Layer 2 solutions such as Optimism and Arbitrum, alleviating pressure from the Ethereum mainnet.

Shifting Market

Bitget Research Chief Analyst Ryan Lee says there has been a “shift” in user interest that has resulted in lower gas fees.

Lee argued that the move towards ecosystems like Solana and Bitcoin, which offer alternative or entirely new experiences and functionalities, decreased the number of users within Ethereum.

Edward Wilson, the social media lead and member of Nansen’s trend-spotting division, agrees, stating that “Ethereum gas is dependent on network usage, and in the past few weeks, activity has been generally lower as the market has also taken a hit.”

Vijay Marolia, the Managing Partner and Chief Investment Officer of multi-strategy investment firm Regal Point Capital, also noted “lower demand, commensurate with lower prices for crypto as people are dealing with higher priorities (read: INFLATION).”

Is This Trend Sustainable?

Experts interviewed by Cryptonews largely believe the trend of decreasing Ethereum gas fees is viable, particularly as blob transactions gain wider adoption.

Edward Wilson noted that it is natural for Ethereum gas fees to “ebb and flow” with market conditions.

“This is normal and sustainable. If we expect the market to heat up, then we’ll see gas fees increase as more opportunities present themselves.”

Vijay Marolia, however, is skeptical about any significant reduction in transaction fees soon. He notes that despite decreasing inflation rates, the cost of living and mining are on the rise.

Patrick Gruhn also finds it challenging to predict the duration of low fees, but he doesn’t anticipate a return to the high fees of the past in the foreseeable future.

Looking ahead, the Ethereum network anticipates further advancements such as proto-danksharding—a preliminary phase of the full vision for sharding Ethereum, which promises increased scalability. This development, however, might take several years to materialize, meaning Ethereum’s fee levels will largely depend on the adoption and efficacy of Layer 2 solutions, including future innovations like ZK proofs and Data Availability Sampling.

Peter Eberle emphasized the long-lasting impact of recent developments but cautioned that gas prices will still experience volatility based on network congestion. “This is peak pricing,” he stated, adding that “there are other EIPs under consideration whose goals are to further reduce gas fees.” This ongoing development cycle indicates that Ethereum is far from finished with its technological enhancements.

Stable and Lower Gas Prices Could Persist

Gabriella Kusz and Santiment’s Kabankin both acknowledge that Ethereum gas prices are subject to fluctuations influenced by technological and broader economic factors. Kabankin added that the inherently volatile and reactive nature of the crypto market means price movements are expected to fluctuate over time. He said:

“A sudden surge in demand for Ethereum-based transactions, possibly driven by a new popular application or a shift in trader sentiment, could quickly drive gas prices up again.”

Kabankin also noted that the critical point is to monitor how technological advancements and shifts in market dynamics interact.

If Ethereum’s scalability improvements can match the growing demand, there may be a more stable lower bound on gas prices. “Yet, any significant increase in network activity could offset this,” he cautioned. Despite this, the lower gas fees might promote more transactions, particularly with stablecoins on the Ethereum network, potentially boosting overall market activity without a corresponding increase in gas prices.

Kabankin concluded:

“While the current low gas prices may not be permanently sustainable given the volatile nature of the crypto market, ongoing technological improvements and strategic shifts in network usage could lead to more stable and generally lower gas prices over time.”

Quantitative to Qualitative Growth

Stijn Paumen argued that the sustainability of low ETH gas fees depends on multiple factors, such as market conditions, user behavior, and further network upgrades. He believes the shift of Web3 users towards alternatives like Solana will likely continue to grow in both the short and long term, keeping fees low on the ETH mainnet.

“However, regulation has a big part to play, with favorable regulations potentially boosting on-chain activity, but stringent ones having the opposite effect, which could reduce fees further.”

Ryan Lee told Cryptonews that the processes we’re witnessing could be seen as a competition between different blockchains for users.

“This indicates that cryptocurrencies are at a point where quantitative growth is transitioning into qualitative growth. This is indeed a sustainable trend that will be interesting to observe.”

Lee said it is a good opportunity for investors and traders to rebalance their portfolios. For users, it’s a chance to take a fresh look at what blockchains offer today.

Impact on Users, Devs, and Ether Price

The impact of the low fees on the Ethereum price is difficult to predict. According to Patrick Gruhn, “external market forces and the second-degree effects of cheaper blockspace are the factors likely to be responsible for much of ETH’s price action.”

Lower fees mean that users who were previously unable to afford to perform transactions due to high costs might now participate in the Ethereum ecosystem. This increased participation could lead to a higher demand for ETH.

Castle Funds’ President Eberle also highlights accessibility, commenting on how lower fees facilitate smaller transactions, boosting overall network demand and possibly the price of ETH.

Eberle also discusses the impact on investors, particularly how current fee levels do not affect staking rewards but could lead to higher ETH prices, benefitting those with stakes in the cryptocurrency. Similarly, Regal Point Capital’s Marolia and Stijn Paumen both foresee a surge in Ethereum’s price and adoption due to increased accessibility and lower operational costs.

Stijn Paumen noted:

“There is a natural correlation to the number of daily users on a specific blockchain and the price of the native token; the more users transacting on the ETH mainnet, the higher the price of ETH.”

Lower fees on Ethereum are good not just for users but also for developers. According to Ryan Lee in an interview with Cryptonews, reduced transaction costs could greatly increase the adoption of blockchain technology. This reduction could speed up the development of decentralized applications, or dApps, and “lead to the return of users who use blockchain daily, for example, for payments and financial operations.”

Stepan Nilov also views these changes positively for the Ethereum network. He said:

“A big chunk of on-chain activity shifting to Ethereum L2s is strong evidence supporting the ‘settlement blockchain’ narrative that has been brewing since the inception of scalability solutions.”

However, there are some risks to consider. Although low fees generally don’t lead to a drop in Ethereum’s price, Ryan Lee points out the potential risks of decreasing ETH capitalization. The community will be looking to see how the Ethereum Foundation and its developers address these challenges. “We will see what actions the Ethereum Foundation, with its talented developers, will take,” he said.

Don’t Rely Solely on Network Demand Metrics

Kabankin from Santimant explained that Ethereum’s network strain and demand offer insights into possible price changes. There is a significant relationship between network demand and gas prices in the cryptocurrency world, especially for Ethereum and its related altcoins. A drop in demand could indicate a slowdown, possibly setting the stage for future price increases as the network adjusts and optimizes.

However, it’s crucial to keep a balanced perspective. The cryptocurrency market is highly volatile and affected by many factors beyond network activity. According to Kabankin, regulatory updates, economic conditions, and new technologies also significantly influence the market.

He also noted that while less strain on the Ethereum network might allow for growth, it doesn’t necessarily predict a major upturn. Market expectations, as seen with events like the Ethereum merge and ETF approvals, can cause early price rises that may not last.

For those tracking Ethereum and its altcoins, it’s important to consider broader market trends, sentiment analysis, and technological progress. These factors offer a more complete view of potential price changes than simply looking at network demand alone.

Attracting DeFi and NFT Projects to Ethereum

Gabriella Kusz noted that lower fees on Ethereum could boost the use and development of the blockchain. These reduced costs make transactions much more affordable, which is excellent news for both everyday users and developers working on Ethereum-based projects.

Patrick Gruhn added:

“Cheaper blockspace could enable previously unviable ideas to bloom involving high volumes of transactions such as a fully-on-chain version of Minecraft, ‘OPCraft,’ where every river, blade of grass, and a patch of snow sitting atop the mountain ranges—exists on-chain, and every single action in the World happens as an Ethereum transaction.”

These lower transaction costs are also drawing decentralized finance (DeFi) projects and non-fungible tokens (NFTs) to Ethereum, enhancing its competitiveness against other blockchains. Kusz further mentioned that these lower fees could help expand the Ethereum-based DeFi and NFT sectors, attracting more developers to the platform.

Vijay Marolia told Cryptonews:

“Because of the genius of blockchain technology and the cost-effectiveness of smart contracts, I see the adoption of all things DeFi increasing over the long term.”

Peter Eberle pointed out that lower fees encourage larger investors to experiment with DeFi on a smaller scale initially. Similarly, Ryan Lee from Bitget Research discussed the potential for innovation within Ethereum, saying:

“The stage of qualitative growth is characterized by the emergence of innovations. We can expect new functionalities that will push the DeFi and NFT sectors forward, especially in a situation of intensified competition between blockchains for users.”

Stepan Nilov added that cheaper transactions especially benefit DeFi, even beyond Ethereum’s primary Layer 1 blockchain, making DeFi particularly promising on Layer 2 blockchains where costs are typically lower. This setup allows for more advanced on-chain activities such as Web3 gaming, SocialFi, and DeFi to flourish.

Making NFTs More Attractive

Stepan Nilov explained that NFTs are somewhat complex because their main appeal lies in their cultural significance and the chance for airdrops. He mentioned, “When you’re paying thousands of dollars for an NFT, the transaction fees don’t matter as much.”

However, for traders who engage less in casual trading and more in seeking airdrop opportunities, gas fees still play a crucial role. Lower gas fees can reduce the costs associated with creating, buying, and selling NFTs, making them more appealing as an investment. Stijn Paumen said:

“Lower fees also reduce the cost of minting, buying, and selling NFTs, which make them a more attractive asset proposition.”

This reduction in costs could lead to increased investments in NFTs, potentially driving up their value. Vijay Marolia also noted the impact of the current real estate market crisis, suggesting that “NFTs are fantastic for real estate” despite NFTs’ mixed reputations. Marolia pointed out that, ultimately, “money talks more powerfully than opinions.”

Impact on On-chain Positions

Lower gas fees create significant opportunities for Ethereum users to manage their on-chain activities more effectively.

Edward Wilson explained how these activities include yield farming, lending, borrowing, managing portfolios, and more. He highlighted the importance of timing, stating, “Doing this when gas fees are high will impact the expected return on investment (ROI).” He emphasized the importance of staying informed about market conditions to make the most of these opportunities.

Stijn Paumen added that reduced gas fees on Ethereum’s mainnet make decentralized finance (DeFi) transactions like lending, yield farming, and swapping not only cheaper but also more accessible. He noted, “This will not only increase activity but also improve the liquidity and efficiency of the network.” These changes help users engage more with the blockchain, potentially enhancing the overall health and functionality of the Ethereum ecosystem.

Low Fees Aren’t Necessarily Good News for All

While lower fees on the Ethereum network generally benefit users by making transactions easier and more affordable, experts point out there are some significant downsides, particularly for network security and miner incentives.

Stijn Paumen highlighted, “Low ETH gas fees are not always great news for all involved.” This sentiment was echoed by Garry Kabankin, who noted that although lower fees facilitate user adoption, they pose challenges for the network’s sustainability. He explained:

“If prolonged, the reduction in fees could potentially reduce the economic incentives for miners, which is critical for the security and robustness of the network.”

This is particularly relevant in the context of Ethereum’s transition to proof-of-stake (PoS), argued Kabankin. The dynamics of network security and miner compensation differ from those of proof-of-work (PoW) but are equally crucial.

Patrick Gruhn discussed how low fees could affect validators or nodes, making them less profitable and potentially undermining the goal of decentralization. However, he also noted that “gas levels are only a small part of validators’ total earnings, so we shouldn’t overestimate this risk.”

Edward Wilson added a perspective for the long term, mentioning that stakers, who typically have a vested interest in the network’s health, may not see this as a major concern, as their focus is more on long-term gains rather than immediate returns from gas fees.

Deflationary Mechanism and Consolidating Power

Stepan Nilov from BlocksBridge pointed out a significant downside to lower Ethereum fees: they negatively impact Ethereum’s deflationary mechanism. With fees decreasing, the daily amount of ETH being burned has also dropped, reaching its lowest point since the 2021 London hardfork—with just 348 ETH burned on May 19. “With less ETH burned, the Ethereum supply has turned inflationary, which, in theory, could affect the price,” Nilov explained.

Garry Kabankin raised another concern regarding the dominance of larger entities in block space due to lower costs. He stated:

“This centralization could lead to vulnerabilities, including potential manipulation of transaction order or even censorship of transactions.”

This situation could centralize what is intended to be a decentralized ecosystem, potentially giving more power to wealthier players.

Stijn Paumen noted a trade-off with low fees leading to increased network congestion, which could reduce transaction efficiency and negate some benefits of lower gas costs. “Essentially, this cancels out some of the benefits of lower gas fees,” Paumen remarked. He also mentioned that while lower mainnet fees are generally positive for Layer 2 solutions, they could make them less appealing, slowing their adoption and impacting Ethereum’s sustainability.

However, Kabankin stresses that it’s important to balance the concerns with the benefits.

Lower fees can drive broader adoption and more innovative uses of the Ethereum network, potentially increasing the ecosystem’s overall value and utility. He said:

“The challenge for Ethereum will be to manage these economic dynamics in a way that maintains network health and decentralization while fostering growth and innovation.”

Is the Ethereum Network Safe?

Recent online discussions have raised concerns about potential security issues from lower Ethereum fees, suggesting they could lead to more spam attacks. However, Peter Eberle disagrees, stating, “I don’t believe this at all.” He explained that this theory assumes that people will no longer stake ETH. However, if people stop staking, the yield rises, which then attracts new people to stake.

Patrick Gruhn acknowledged, “It is potentially a risk,” but he believes that “even low gas fees still create a financial barrier for attackers.” He mentioned that other mechanisms, like the gas limit per block and prioritized transactions, help mitigate this risk.

Ryan Lee further noted that traditional market fees used by Ethereum serve as an effective means of protection against spam transactions. That said, fees should be maintained at a level sufficient to make attempts to spam the network costly.

51% Attack is Unlikely

While the consensus is that a 51% attack on Ethereum is highly unlikely, some experts acknowledge the potential for certain attack types. Gabriella Kusz pointed out that one major drawback of lower fees is that they could make it cheaper to conduct advertising and spam attacks.

Stijn Paumen explained that an increase in transactions on the mainnet, combined with reduced incentives for validators, might lead to vulnerabilities and potential network attacks. This situation could adversely affect both users and projects, added Patrick Gruhn.

Garry Kabankin goes further, stating:

“Absolutely, the concern about spam attacks due to lower transaction fees on Ethereum is a valid point.”

Despite these risks, the probability of a 51% attack remains extremely low due to Ethereum’s extensive and decentralized nature. However, the lower transaction costs might make it more economical for malicious actors to launch spam or flooding attacks. These types of attacks could clog the network, slow it down, and possibly cause a temporary increase in fees as demand for processing power spikes.

From Poison to Sandwiches

Alex Dulub, Founder of Web3 Antivirus, agreed that lowering gas fees in blockchain transactions can “lead to some changes in the security landscape.” While it makes transactions cheaper, it also opens the door for a higher number of specific attacks, he said. Here are some of them.

Poisoning Attacks

Poisoning attacks trick users by inserting a fake address that looks like one they’ve previously used into their transaction history. Dulub explains that scammers rely on users who do not check every character of an address. When copying addresses, most people just verify the first and last few characters, which could lead them to send assets to a scammer’s account mistakenly. Even with higher transaction costs, these attacks have been problematic; one recent incident cost a victim over $4 million due to a mistakenly copied address. Lower fees could lead to an increase in such deceptive practices.

These attacks have been a concern even with high gas fees. For instance, Dulub said, a recent case cost the sender over $4 million after accidentally sending tokens to the scammer’s address. Lower gas fees could lead to an increase in such attacks.

Scam Token Distribution

Scam tokens are a significant problem in the crypto space, Dulub said. Attack methods include:

  • phishing tokens: token names contain URLs to phishing sites;
  • honeypot/rug pull tokens: tokens distributed under the guise of legitimate projects.

Lower gas fees lower the barrier to entry for these attacks, reducing the cost and allowing scammers to target more victims.

Increased Frontrunning Risks

Frontrunning, particularly through “sandwich attacks,” involves attackers noticing a pending transaction in the mempool and jumping ahead by paying higher gas fees. This allows them to buy tokens before the transaction and sell them at a higher price once the user’s transaction increases the market price.

Dulub said a notable example is a bot known as Jaredfromsubway.eth. It executed over 238,000 attacks and took more than $6 million through frontrunning and sandwich attacks.

This bot significantly impacted the Ethereum network by increasing average gas fees and targeting meme coin traders due to their high transaction volatility and tax mechanisms. Lower fees could heighten these risks, encouraging users to pay more to prioritize their transactions, which in turn makes such attacks more viable and damaging.

Proactivity at Work

Alex Dulub pointed out that while the rise in certain types of cyber attacks is concerning, these are not likely to significantly compromise the overall security of the blockchain ecosystem. He emphasized the necessity of addressing these security concerns to protect users and their assets effectively.

Garry Kabankin added that it’s crucial to consider Ethereum’s ongoing improvements and protocol upgrades, which aim to enhance network security and scalability.

For example, the shift to Proof-of-Stake “changes the dynamics of network security, focusing more on staking rather than mining, which inherently alters the potential impact and feasibility of spam attacks.”

Moreover, the Ethereum developers and community are “highly proactive” in monitoring and mitigating risks. They continually develop tools and strategies to manage and “quickly respond” to unusual network congestion or suspected spam activities.

Kabankin concluded:

“While lower transaction fees might theoretically make it easier for bad actors to abuse the network, the strength of Ethereum’s evolving architecture combined with the vigilance of its community acts as a powerful barrier against such risks.”