Footprint | Ethereum London Upgrade has been over half a year, how has the data of Gas Fees changed?

How has the Gas fee changed after the Ethereum London upgrade? Smart users can choose optimal transaction methods and time periods through data analysis.

March 2022, Simon
Data Source: Footprint Analytics Gas Dashboard

With the rise of DeFi, NFT, and GameFi on fire, Gas fees on Ethereum are soaring, prompting other blockchains to come online to address the issue.

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Ethereum's market share has dropped to below 60%, but it must be acknowledged that many excellent projects still choose Ethereum as their first option, making Gas fees relevant to every user.

The London upgrade in August changed the charging structure of Gas fees, sparking ongoing discussions. In the following, this article will review the performance of Gas fees in the past six months post-upgrade through Footprint Analytics data.

Gas Prices Show No Clear Trend Change

In the London upgrade, scalability was not the primary focus. Therefore, looking at the average gas fees and base fees over the past 6 months, there has been no significant trend change.

What has changed is the fee structure, dividing the original fee into base fees and priority fees. The base fee is burned, and miners can only receive the priority fee. Gas prices will increase or decrease based on the utilization of the previous block, making user costs more predictable and reducing the waste caused by paying excessive gas fees.

It can be seen that after the upgrade, users still mainly pay base fees, with priority fees to miners accounting for only about 15%. While the percentage of priority fee prices exceeding 50% at individual times, the overall payment of priority fees remains relatively stable.

Median Gas Prices Shift Left

For users, the total cost of a transaction is more important. Although there hasn't been a significant decrease in gas fees overall, a subtle difference can be seen in the median gas prices. The median gas price over the past 30 days is 71.8 Gwei, compared to 79 Gwei in September.

Looking at the distribution of gas prices, the data for the past 30 days shows a slight leftward shift compared to September. The proportion below 60 Gwei has increased by 9%, accounting for 50% of users, with approximately 90% of transactions below 140 Gwei. Although the change is not significant, it has indeed reduced gas prices for some users.

Gas Prices Exhibit Daily Regular Fluctuations

Gas fees ultimately reflect supply and demand. At the current stage of rapid blockchain development, significant price reductions are challenging. Data from Footprint Analytics shows that gas prices follow a pattern at different times, allowing users to save costs by avoiding peak transaction times.

Looking at different times of the day, over the past 3 months, gas prices from 4 to 13 UTC are lower, averaging below 100 Gwei, while costs rise at other times. The price is lowest around 11 o'clock, approximately 76 Gwei, and peaks around 150 Gwei at 17 o'clock. Choosing the right transaction time can save nearly half of the costs.

Similarly, the variance after 14 o'clock is higher, indicating more significant price fluctuations during these periods. For those seeking stable prices, trading during periods with lower variance is advisable.

Looking at prices by week, the lowest prices are on Sundays, followed by Saturdays, with the highest prices on Thursdays. People tend to trade more on weekdays.

The highest variance in prices occurs on Saturdays. Therefore, for users seeking stable and low prices, Sundays would be a good choice. Choosing non-workdays and reasonable time periods can significantly save on gas fees.

Will Gas Fees Decrease in the Future?

While Ethereum is advancing with the London upgrade, it is also progressing with layer 2 scaling and Ethereum 2.0. After the Ethereum 2.0 upgrade, PoW will transition to PoS mechanism, and the network will move from a single chain to multi-chain sharding.

Many are hopeful that gas fees will decrease with these changes. Although upgrading to 2.0 will increase network throughput through sharding, reducing network congestion, the completion of sharding is a lengthy process.

Given the current trend of the crypto world, the demand for on-chain transactions continues to rise. Under such rapid growth, the demand exceeding supply will drive up gas prices.

Also, consider the price of ETH. The London upgrade also introduces a burning mechanism, estimating to burn 1.8 million ETH annually at the current burn rate. With the transition to PoS, the issuance of ETH will significantly decrease, potentially leading to ETH becoming deflationary. If the price of ETH rises, the gas fees paid in ETH would passively increase.

Users looking to navigate the crypto world cannot avoid gas fees, acting as the "fuel." While they can't control the "fuel price," savvy users can choose optimal transaction methods and timeframes through data analysis.

This article is contributed by the Footprint Analytics community

The above content is for personal perspectives, reference, and communication purposes only and does not constitute investment advice. If there are significant misunderstandings or errors in the data, please feel free to provide feedback.

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