Ethereum Fees Hit 7-Year Low in Big Network Reset

The Ethereum (ETH) blockchain network is becoming much cheaper to use. Transaction fees on the blockchain have dropped to their lowest level since 2017. 

Data from Glassnode shows that the average cost of sending a transaction has fallen sharply, from highs of around $200 in past years to just 14 cents this year. 

Ethereum Upgrades Boost Speed and Cut Costs

The Ethereum network’s low transaction fees is mainly because of several upgrades over the past few years that made the network faster and more efficient.

One of the biggest changes was Ethereum’s switch from Proof of Work to Proof of Stake. This upgrade cut energy use and helped the network process transactions more smoothly. Later upgrades, such as Fusaka and Dencun, also increased capacity and improved how data is managed.

Aiding the network’s efficiency, validators agreed to raise the gas limit per block from 30 million to 36 million. This means each block can now include more transactions, which reduces delays and keeps fees down during busy times.

Another important reason fees are falling is the rise of Layer two networks. Platforms like Arbitrum and Base move transactions off Ethereum’s main chain and then record the final results back on it.

As more users rely on these Layer two networks, the main Ethereum network becomes less crowded. 

Ethereum Fees Drop as Network Activity Hits Record Highs

Ethereum fees were extremely high during the Non-Fungible Token (NFT) boom of 2021 and 2022. At that time, heavy trading and speculation pushed average fees into the range of $50 to $200 per transaction.

After that surge, fees dropped sharply in late 2022 and stayed mostly low, with a short spike in early 2024. Since February 2025, fees have been in a steady decline. 

The total amount of fees paid to validators has also fallen. Five years ago, validators earned tens of thousands of ETH in fees each week. Today, that figure has dropped to a small fraction of that amount.

Meanwhile, lower fees often signal weaker demand for block space. However, this does not mean Ethereum is being used less. Even with cheaper fees, activity on the network is at record highs. 

In January 2024 alone, Ethereum processed more than 16 million transactions. That is far more than during the 2021 peak, but at only a fraction of the cost. 

Lower Fees Do Not  Weaken Ethereum’s Security

Some people worry that lower fees could affect validators, who help keep the network secure. However, Ethereum’s switch to Proof of Stake changed how validators make money.

Instead of relying mostly on fees, validators now earn regular staking rewards. These rewards average about 3% per year.

This means the network no longer depends on high transaction fees to stay secure. From a security point of view, the system remains strong even when fees are low.

Lower fees also help infrastructure providers, such as data and oracle services, which rely on frequent updates. Cheaper transactions reduce friction and make it easier to support applications at scale.