In a landmark development for the blockchain industry, the Ethereum network has achieved a historic milestone as average transaction fees have plummeted to levels not seen since May 2017. According to on-chain analytics firm Glassnode, the average gas fee has dropped below 10 Gwei, translating to a cost of less than $0.01 per transaction. This dramatic reduction persists despite the network processing near-record activity, with close to 2.9 million transactions in a single day in January 2026—a stark contrast to past cycles where similar demand would have caused fees to spike into the tens of dollars.
The primary driver behind this shift is the successful execution of Ethereum's multi-year scaling strategy, most notably the Dencun upgrade implemented in March 2024. This upgrade introduced proto-danksharding via EIP-4844, which drastically reduced data storage costs for Layer 2 rollups like Arbitrum, Optimism, and Base. Consequently, a massive volume of transaction activity has migrated off the Ethereum mainnet (Layer 1) to these secondary scaling solutions, alleviating core network congestion and enabling cheap transactions on the base layer even during high demand.
The immediate impact is overwhelmingly positive for the ecosystem. Everyday users can now interact with decentralized applications (dApps), execute token swaps, and send small-value transfers without the prohibitive costs that once challenged the network's scalability. For developers, predictable and low operational costs reduce overhead for deploying and maintaining smart contracts, fostering a more innovative environment.
Analysts view the data as validation of Ethereum's 'rollup-centric' roadmap. "The Glassnode data isn't an anomaly; it's the expected outcome of a multi-year architectural shift," noted a blockchain data researcher. This aligns with the vision of the base chain evolving into a secure settlement layer while execution moves to Layer 2.
However, the new fee regime introduces complex economic dynamics. With fees lower, less ETH is burned via the EIP-1559 mechanism, potentially reducing the network's deflationary pressure. This is partially offset by reduced selling pressure from validators who earn lower fee rewards. The long-term goal remains to sustain this accessible cost structure through future upgrades like Verkle trees (Prague/Electra) and further Layer 2 optimizations, solidifying Ethereum's position as a robust, scalable global computer.
