Ethereum network fees have dropped to their lowest level since 2017, with the average transaction cost falling from a peak of $200 to just $0.14 this year, according to data from Glassnode. This significant decline is attributed to a series of major scaling upgrades implemented since 2021, including the transition to Proof-of-Stake (PoS) and the Fusaka and Dencun upgrades, which have improved network capacity and efficiency.
A key factor in reducing congestion on the Ethereum mainnet has been the migration of users to Layer 2 (L2) networks like Arbitrum and Base. Additionally, validators agreed to increase the gas limit per block from 30 million to 36 million, allowing each block to process more transactions. "Cheap transactions on mainnet are definitely a net positive for the industry," said Ivo Georgiev, cofounder and CEO of Ambire Wallet. "Users gain more confidence in the protocol, they concentrate more of their assets on mainnet, leading to better UX." Georgiev added that lower fees could unlock new possibilities, such as quantum-proof cryptographic protocols.
Historical data shows a dramatic fee trajectory: During the 2021-2022 NFT boom, ETH transaction fees averaged $50-$200. They fell sharply to under $2 in November 2022, spiked to $35 in March 2024, and have been on a sustained downturn since February 2025. The total amount of fees paid to validators has plummeted from a seven-day average peak of about 25,668 ETH (~$77M) five years ago to just 153 ETH (~$450K).
Despite the fee drop, Ethereum's Layer 1 network activity is at an all-time high. According to Leon Waidmann, head of research at Lisk, Ethereum's transaction volume exceeded 16 million in January 2026. Waidmann notes that Ethereum is now processing three times the number of transactions at just a third of the cost compared to the 2021 peak, signaling a shift from speculation-driven activity to "actual usage at scale."
While lower fees benefit users, concerns have been raised about validator income, which relies partly on transaction fees. Marcin Kaźmierczak, cofounder of RedStone, downplayed these fears, stating that Ethereum's switch to PoS "eliminated miner revenue dependency on transaction fees entirely." Validators now earn via staking yields (~3% APY), making the network's security robust and not dependent on fee spikes. Kaźmierczak highlighted that low fees reduce friction for infrastructure providers like RedStone, which benefit from cheaper data updates.
Concurrently, Ethereum's price faces technical pressure. Analysts point to a critical short-term pivot at $2,780, with failure to reclaim this level potentially exposing ETH to a test of the $2,620 liquidity zone. The broader chart structure suggests the market is in a period of compression, likely preceding a sharper directional move. Some projections indicate a potential expansion toward $3,700-$3,800 if bullish conditions align.
