The crypto money market, which has not seen a pandemic and recession before, has been going through a very difficult process in the last 2 years. Rising interest rates and rapidly rising inflation all over the world have caused many data to reach historical lows.
For nearly two years, from January 2021 to May 2022, the average transaction fee for the Ethereum network was around $40. The summit was seen on May 1, 2022, with 196 dollars. So much so that the transaction fee cost even exceeded the base price of many NFT collections. This spike in May was linked to ApeCoin's metaverse land sales.
Ethereum confirms an average of 15 transactions per second and was not attracting the attention of low-budget NFT investors due to high transaction fees. For this reason, NFT collections in alternative networks such as Polygon and Solana grew rapidly and gained market share. But things are changing, transaction fees on the Ethereum network are bottoming out, although not cheap until faded.
The biggest obstacle to mainstream dominance of the Ethereum (ETH) ecosystem is the extremely high transaction fees usually required to complete a transaction. However, things are changing as Ethereum's average gas fees drop to 0.0015 ETH. Transaction fees on the Ethereum network have dropped to the $1.5 level these days. These figures were last seen in December 2020.
Contrary to this sudden drop in gas prices, daily NFT sales fell to the lowest level in a year on Saturday. In other words, there was a decrease to the levels when the great NFT enthusiasm started. The NFT ecosystem recorded its worst performance of the year in June, with total daily sales dropping to nearly 19,000 and an estimated value of $13.8 million.
In November 2021, when numerous investors complained of excessively expensive transaction fees, Ethereum co-founder Vitalik Buterin published a cost cut and cap proposal to reduce unprecedented levels of tension on the network. Buterin proposed a short-term solution to further reduce aggregation costs by imposing a call data cap per block to lower ETH gas costs. But for now it doesn't seem necessary. The waning appetite in risk markets has reduced cryptocurrency and nft trading volumes as investors turn to less risky assets. Decreased demand in the network drove transaction (gas) fees to the bottom.