In this article. Ethereum fees have increased 50x from recent lows.
Inflation in L1 is coming down, but rents in L2 have increased 100% in 24 hours.
L2 is trying to ensure profits by using #Ethereum for security.
#ETH is a game changer for L2 applications; L1 network fees have started to rise in the last month. ETH is leaving the era of ultra-low fees and becoming more expensive for L2 applications; the right balance between L1 and L2 has not yet been reached and continues to change. There is still no consensus on what is better - expensive ETH services or let L2 keep its fees.
As of September 23, Ethereum service fees have risen from less than $1 million per day to more than $7.98 million per day. Gone are the days when fees were less than 1 gwain, and gas has risen to 45 gwain for a typical transaction; L1 Ethereum can become very expensive relatively quickly, as it did within two weeks.
On the back of rising gas prices, there has been a rebound in the price of ETH. The token increased its market dominance to 14.2% and traded at a price of $BTC The rise in gas prices immediately increased token burn per block. As a result, Ethereum's inflation rate has dropped to 0.33% from its recent peak of 0.74% year-over-year. The inflation rate fluctuates even within a single day,
the decrease in ETH mining means that instead of 990,000 ETH per year, 550,000 ETH is created. Every week, instead of nearly 16,000 ETH, there are 7,272 additional ETH in circulation. Inflation on Ethereum is also lower than on other major chains. Even with the issuance of additional new tokens, inflation is only 1.51% compared to the all-time high. In contrast, major competitor Solana (SOL) has expanded its supply by more than 55% since 2021.
Even low inflation for Ethereum could impact the L2 app ecosystem and the flow of Ethereum to these platforms.
Previously, high fees were considered a bullish factor for Ethereum.
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