On Feb. 28, gas fees on Ethereum fell back to the $11.21 level. This is a considerable drop since transaction prices skyrocketed above $38.21 on Feb. 23.
Currently, an average transaction on Ethereum costs around $10.80, according to Etherscan.io.
As for the decentralized finance (DeFi) sector, a single token swap on Uniswap, Ethereum’s most prominent decentralized exchange (DEX), could cost anywhere between $217 and $286, depending on its priority:
Where Is Ethereum Heading Next?
The drastic surge in Ethereum (ETH) transaction fees occurred at a time when the whole crypto market crashed into the red zone on Feb. 22. On that day, ETH prices dipped below $1,700, falling over 12% on the day.
Ethereum fell to $1,300 on Feb. 28. Meanwhile, BTC’s red week saw its price drop as low as $43,000 — a 25% drop for the week.
As of press time, ETH is trading for $1,530, down over 21% from its all-time high. Bitcoin is expected to break out from a descending wedge to move towards $50,000 again.
EIP-3298 to Make Ethereum Stronger?
Ethereum’s network clog remains to be a heavy burden for the developers and traders. Following the gas-related troubles, founder Vitalik Buterin released a new ETH improvement proposal dubbed EIP-3298 on Feb. 26. It suggests removing gas refunds for the “SSTORE” and “SELFDESTRUCT” functions in Ethereum’s London update.
The former allows storing gas inside smart contracts. Using the latter, Ethereum’s clients can cover the cost of a transaction with the stored gas when prices are high. Users benefit from this through gas tokens like CHI and GST2 arbitraging the price of gas.
Some investors like ParaFi Capital’s Nick Chong think that the recent proposal may be a major factor contributing to gas prices falling back:
EIP-3298 is scheduled for Q2 2021. If passed it may help Ethereum to regain some of the market share that it has lost to DeFi competitors like Binance Smart Chain (BSC).