Ethereum's Gas Fees Dominate Despite Low Transaction Costs

Ethereum continues to dominate in all-time gas fees, particularly in the decentralized finance (DeFi) sector, despite a decline in on-chain activity and the lowest transaction costs in over four years. According to data analytics platform Growthepie, Ethereum's Layer 1 blockchain still leads in all-time gas fees generated across various sectors, excluding social.

In the DeFi space, Ethereum (ETH) has accumulated over $1.68 billion in total gas fees. It remains the leader in DeFi gas fees on all timeframes, including all-time, monthly, 3-month, and weekly. This indicates that Ethereum is still the dominant platform for DeFi usage, even though Layer 2 solutions typically offer cheaper fees.

While Ethereum is generating all-time high gas fees, the actual transaction costs are currently at their lowest levels since July 2020. This is primarily due to the low median gas price, which is averaging 3 Gwei (a tiny fraction of an ETH). On February 16, the median gas price reached 1.19 Gwei, the lowest level since January 2020.

However, despite the low transaction costs, on-chain activity on Ethereum is slowing down. The 7-day moving average (7DMA) of Ethereum's on-chain volume dropped to approximately $3.77 billion on February 18, marking the lowest daily volume for Ethereum since November 2020. This suggests that there is less demand for Ethereum transactions rather than increased network efficiency.