Ethereum Average Fees Have Registered a Notable Uptick Recently
Recent on-chain data indicates that Ethereum transaction fees have been rising. According to Santiment, an on-chain analytics firm, the Ethereum network has become more costly for users. The focus here is on the “Average Fees” metric, which tracks the average fees attached to Ethereum transactions.
The fees users are willing to pay depend on the blockchain’s activity level. During periods of high traffic, transactions can get delayed because Ethereum has limited capacity to process them. To avoid long wait times, users often opt to pay higher fees.
This competitive bidding among users drives up the average fees. Conversely, during low activity periods, users tend to pay the minimum fees, as there is no urgency to process transactions quickly.
Recent Trends in Ethereum Average Fees
Let’s examine the recent trend in Ethereum Average Fees over the past few months:
Note: The following data is sourced from Santiment.
The Ethereum Average Fee has been on the rise lately, reaching $3.2, the highest since early August. Although there was a brief spike in August, it was short-lived and coincided with a market crash, leading to panic transactions with high fees.
Prior to this, the last significant sustained trend in fees was observed in late May. Therefore, the current fee level represents the highest point in four months.
Possible Reasons for the Recent Fee Increase
One apparent reason for the recent fee surge is the rally Ethereum has enjoyed. Sharp price movements attract increased activity, driving up the Average Fees.
However, a deeper look into the fee breakdown suggests that regular Ethereum traders may not be the primary contributors to this increase:
Note: The following data is sourced from Santiment.
Wrapped Ethereum (WETH) has been the dominant contributor to network fees recently. According to Santiment:
The dominance of WETH in fee contributions indicates that traders are heavily utilizing DeFi platforms, likely engaging in liquidity pools, trading, and other financial activities that require WETH as a base asset.
Current Ethereum Price
As of the time of writing, Ethereum is trading around $2,700, marking a 5% increase over the past week.
The coin’s price appears to have been consolidating in recent days.
