Ethereum Gas Fees Plummet 95% Post-Dencun Upgrade

Ethereum's average gas fees have experienced a dramatic reduction, dropping by 95% in the year following the Dencun upgrade. This significant network improvement, rolled out on March 13, 2024, combined the Cancun upgrade on the execution layer and the Deneb upgrade on the consensus layer, introducing nine Ethereum Improvement Proposals (EIPs). The primary objective of the Dencun upgrade was to enhance Ethereum’s scalability and reduce transaction costs for layer-2 networks.

The impact of the Dencun upgrade is evident in the significant decrease in gas fees. Prior to the upgrade, an average swap cost users $86 in fees, while non-fungible token (NFT) sales averaged $145 in gas fees. As of March 12, 2025, an average swap would cost $0.39, and an NFT sale would average $0.65. This reduction in gas fees is a testament to the success of the Dencun upgrade in making Ethereum more efficient and cost-effective for users.

Despite the sharp drop in gas fees, the price of Ether (ETH) has declined by 53% since the Dencun upgrade. During the upgrade in March 2024, ETH was trading above $4,070. One year later, as of March 13, 2025, ETH was valued at around $1,891. This price decline suggests that while the Dencun upgrade has improved the network's efficiency, it has not translated into a corresponding increase in the value of Ether.

The upcoming Pectra upgrade, Ethereum’s next major upgrade, was rolled out on its final testnet, Sepolia, on March 5. However, the team encountered error messages and empty blocks being mined. Ethereum developer Marius van der Wijden confirmed that a fix was deployed, but an unknown user later triggered the same error, leading to further issues. The development team has since managed to stabilize the testnet and successfully process transactions.

While these testnet issues are disruptive, they are not the biggest problems facing Ethereum. The Pectra upgrade, once live, is expected to double the available data space for layer-2s, reduce costs, and increase execution capacity. However, it is not seen as a fix-all solution to Ethereum’s deeper issues. The industry is searching for a new, more sustainable and secure frontier for decentralized finance (DeFi), and Ethereum is quickly losing its position as the go-to chain for builders.