The Ethereum network is experiencing a surge in transaction volumes, resulting in a significant increase in gas prices, according to on-chain analytics firm Glassnode. Gas fees have more than tripled since the end of 2022. In the past nine months, Ethereum transactions have averaged between 10-20 gwei, but due to high transactional volumes, this figure has risen to 38 gwei.
Glassnode suggests that the incremental nature of the gas demand indicates an early resurgence of network activity. Ethereum gas fees typically fluctuate depending on network demand, so as more users try to add a transaction on the next block, the fees/costs will rise.
The recent surge in transaction volumes and gas fees is not due to new wallets joining the Ethereum ecosystem, but rather existing traders driving the growth. NFT trading activity, including the launch of highly engaging and rewarding games like Dookey Dash and the announcement of new projects such as Doodles 2, has contributed significantly to the increase in gas fees.
Blur’s recent attention has led to a surge in demand for block space, resulting in increased fees for validators and more ETH being burnt via EIP1559. However, Julian Holguin, CEO of Doodle, has highlighted that the competition between the two leading NFT marketplaces has constricted the cash available to many NFT projects that have relied on secondary royalties for revenue.
Despite the controversy, NFT transactions on Ethereum have risen by 97% for the past two consecutive months, approaching levels last seen during the NFT boom from mid-2021 to mid-2022.