Ethereum Transaction Fees Fall as DeFi Euphoria Wanes
The average transaction fees in the Ethereum network are down over 80 percent after peaking in early Sep 2020. By Oct 6, network users on average paid $2 per transaction, a huge relief for struggling dApps of which most were contemplating to shut down because of high network fees.
The blossoming DeFi market was said to not only help buoy ETH prices--benefiting miners, but partly contribute to the untenable use of the Ethereum network. While this could be one explanation, the rise of Layer-2 solutions like Optimistic Rollups also help relieve the network from the high transaction fees.
Impact on ETH Price:
Neutral. Several factors influence ETH prices. The relationship between network transaction fees and ETH prices is positive only that in the medium term, there are Layer-2 solutions to help scale the network and improve users experience which neutralize bear pressure.
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