Ethereum
Ethereum Fees Hit All-Time Low as L2 Grabs User Attention: IntoTheBlock
Share this article
Ethereum transaction fees have reached a six-month low, driven by transactions moving to layer 2 (L2) blockchains, according to the latest edition of IntoTheBlock’s “On-chain Insights” newsletter.
This migration contributed to a decrease in the total fees accumulated by Ethereum. In April, transactions on the three largest L2s, Arbitrum, Optimism and Base, accounted for an unprecedented 82% of all Ethereum transactions.
With the inclusion of additional L2s, this percentage is likely even higher. The launch of EIP-4844 on March 13 played a crucial role in this transition by reducing L2 fees by more than ten times, leading to a 10% drop in mainnet transactions and a shift in the economics of Ethereum tokens.
In the competitive L2 landscape, different platforms are carving out their place. Institutions showed a preference for Arbitrum, which dominated 73% of Ethereum’s trading volume among major L2s. Conversely, Arbitrum accounted for only 39% of the number of transactions, while Base captured 50%. Notably, Blackrock and Securitize recently applied to list real-world asset fund BUIDL on Arbitrum.
On the retail side, Optimism’s OP Stack has gained traction with “SocialFi” apps. Coinbase’s L2 Base saw a surge in transactions following the FriendTech airdrop, and social media-based card game Fantasy.top generated $6 million in fees this week on the L2 Blast. This diversification of applications has intensified competition between L2s, particularly in terms of market capitalization.
Optimism’s OP token saw a 48% increase from its April low, outperforming ARB’s 22% gain. The OP token now surpasses ARB in terms of circulating market capitalization and fully diluted valuation. Additionally, venture capital firm a16z’s $90 million investment in OP boosted the project’s resources and credibility.
Continued competition between L2s results in lower fees for Ethereum in the short term. However, this simultaneously fosters a rich ecosystem of applications that promise to drive economic activity and deliver long-term benefits, IntoTheBlock concludes.
Share this article
The information available on or accessible through this website is obtained from independent sources believed to be accurate and reliable, but Decentral Media, Inc. makes no representations or warranties as to its timeliness, completeness or the accuracy of any information available on or accessible through this website. . Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. Information on this website is subject to change without notice. Some or all of the information contained on this website may become out of date, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any information that is out of date, incomplete or inaccurate.
Crypto Briefing can enrich articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable, actionable insights without losing the insight – and oversight – of experienced crypto natives. All AI-augmented content is carefully reviewed, including for factual accuracy, by our writers and editors, and always draws on multiple primary and secondary sources where available to create our stories and content. items.
You should never make an investment decision about an ICO, IEO or other investment based on the information contained in this website, and you should never interpret or rely in any way on the information contained in this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for the analysis or reporting of any ICO, IEO, cryptocurrency, currency, tokenized sales, securities or materials firsts.