Ethereum users are now enjoying the lowest transaction fees seen on the network in five years as on-chain activity slows significantly ahead of the anticipated Pectra upgrade.
Brian Quinlivan, the firm’s marketing director, noted in a blog post that the decline in activity is due to reduced demand, with fewer users engaging in smart contracts or transferring Ether (ETH). This has resulted in diminished competition and lower transaction fees, which have fallen to an average of $0.168 on the Ethereum network, as reported by Santiment.
“When Ethereum sees high usage, users bid higher fees for faster confirmation. But when activity cools off, there’s no need to outbid others, so fees naturally fall,”
Quinlivan noted. He added that while low fees typically signal a lack of trading momentum, it could also suggest traders are holding off in light of ongoing global economic uncertainty.
This economic hesitation follows the April 2 announcement of sweeping tariffs by U.S. President Trump, which rattled both traditional and crypto markets. Despite a 90-day pause and certain exemptions, many assets—including Ether—have yet to bounce back. ETH has dropped over 12.5% in the past two weeks and remains flat over the past 24 hours, trading just under $1,600, according to CoinGecko.
Quinlivan pointed out that social sentiment around Ethereum has become more reactive to economic developments, noting that retail interest seems to be fading. Still, he suggested this quiet phase might set the stage for a sharp, unexpected rebound.
Meanwhile, Ethereum’s next major upgrade, dubbed “Pectra,” is scheduled for mainnet activation on May 7. The first phase of the upgrade is set to double the blob capacity for layer-2 data from three to six, helping to reduce congestion and lower fees even further. It will also introduce the option to pay gas fees using stablecoins like USDC and DAI. Additionally, the Pectra fork will raise the staking cap from 32 ETH to 2,048 ETH, marking a major shift in validator flexibility.
Source: DeFi Planet / Digpu NewsTex