Gas fees on Ethereum fell nearly 70% after going above $ 38 per transaction.
ETH price has rebounded above $ 1,500, gaining 11.5% in the past 24 hours.
Ethereum Improvement Proposal (EIP) 3298 aims to significantly reduce gas costs.
On February 28, gas charges on Ethereum fell back to $ 11.21. This is a significant drop considering that transaction fees recently skyrocketed, topping $ 38.21 on February 23.
Currently, an average Bitcoin Bank transaction costs around $ 10.80, according to Etherscan.io .
When it comes to the decentralized finance (DeFi) industry, a single token exchange on Uniswap , Ethereum’s main decentralized exchange (DEX), can cost anywhere from $ 217 to $ 286, depending on its priority:
What is Ethereum’s next direction?
The drastic rise in Ethereum’s (ETH) transaction fees occurred as the entire cryptocurrency market fell into the red on February 22. That day, the price of ETH fell below $ 1,700, falling more than 12%.
Since then, Ethereum has undergone a sharp correction, mimicking the trajectory of Bitcoin’s (BTC) price. The correlation between the two assets has been high over the past week.
Ethereum fell to $ 1,300 on February 28. For its part, during this red week, BTC saw its price drop to $ 43,000. This is a 25% drop for the week.
At the time of the layout of this article, ETH is trading at $ 1,530, down more than 21% from its all-time high. Bitcoin, for its part, is expected to move out of a declining range and move closer to $ 50,000 again.
Will the EIP-3298 strengthen the Ethereum network?
Ethereum network congestion remains a heavy burden for developers and traders alike. Following the gas-related issues, founder Vitalik Buterin released a new ETH improvement proposal on February 26 , dubbed EIP-3298. In this proposal, it is suggested to remove the gas refunds for the “SSTORE” and “SELFDESTRUCT” functions in the London update of Ethereum.
The first function allows gas to be stored under smart contracts. Through the second, Ethereum customers can cover the cost of a transaction with stored gas when prices are high. Users benefit from this through gas tokens like CHI and GST2, which arbitrate gas costs.
Some investors, like Nick Chong of ParaFi Capital, believe this new proposal could be a big factor in lowering gas costs: