January 28, 2023

Ethereum gas fees have been a cause of serious pain for blockchain users for a long time and there have been many attempts at fixing the situation to no avail.

The booming NFT markets are one of the many reasons why gas fees became so expensive in 2021. Non-fungible tokens witnessed a recovery in August 2021 which consequently increased trading fees to their highest point in about three months prior. The forced Ethereum holders and users to seek alternative ways for blockchain transactions.

Aside from NFT trading, related activities like complex operations of smart contracts, and token exchanges are really more expensive on the blockchain. Swapping a Uniswap token can be as expensive as $30, as seen on the Etherscan tracker tracking gas fees.

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The tables have, however, sharply turned and Ethereum gas fees are falling, almost steadily. As reported by Decrypt, average transactions on Ethereum dropped drastically by up to $10.

Gas Fees Falling

The average cost of transactions is sitting within an unprecedented low. The prices are not specifically low in the real sense of the word, but for long-time investors in the decentralized finance space, it is a significant development and a signal of encouragement.

The question observers in the crypto space have asked is; what brought about the fall? And by Decrypt’s report, NFTs might be the essential constituent.

Following months of some tedious activities, NFT trading finally showed some sign of cooling off. The needed trading gas has reduced significantly and there is a noticeable reduction in the volume of Ethereum on OpenSea in the course of the past few days. There were also details from Decrypt that in the course of 1st to 6th February, the value of trade on the OpenSea network went down from $247 million to about $124 million.

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Is NFT losing Its Spotlight Position?

It has been previously predicted by analysts at JP Morgan that Ethereum’s network jam and expensive gas fees might create problems for the coin’s valuation because those two factors put it at great risk. The gas fees especially put the blockchain at the risk of losing its grip in the NFT market to its more price-friendly competitors such as Avalanche, Binance Smart Chain, Solana, and Terra. These other blockchains have successfully gained a lot of traction over the course of time.

As revealed by JP Morgan’s reports, a lot of NFT traders and collectors have moved from using Ethereum to Solana because of the latter’s advantages when it comes to delivering faster transactions at less cost. It also told Business Insider reporters that NFTs are a very potent growth opportunities for the crypto ecosystem. Therefore, in spite of the fact that NFT has a huge effect on Ethereum’s successes, it may be quite early to say that NFT is by any means losing appeal. 

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