The handling fees on the Ethereum chain have dropped to a freezing point. Is the development of L2 reshaping the economic landscape of Ethereum?

According to data from The Block, Ethereum’s seven-day average transaction fee has dropped to its lowest level since October last year, and the fee required to send a transaction on the Ethereum chain is currently only about $2.

The reason for this phenomenon may be related to the transfer of some transactions to the second layer network (L2). According to the latest report released by IntoTheBlock, in April this year, the transaction volume of the three largest L2 networks - Arbitrum, Optimism and Base - accounted for approximately 82% of all transactions on Ethereum. Taking into account other L2 and more and more With L2 deployments, this percentage may increase further.

IntoTheBlock pointed out that in the L2 competition, different platforms are dividing their own market territory. Institutions prefer to use Arbitrum, which accounts for 73% of the Ethereum transaction volume in the top L2, but in terms of "transaction volume", Arbitrum only accounts for 39%, indicating that most Arbitrum users are high-net-worth investors. In comparison, Base has a 50% share in terms of “number of transactions.”

In terms of retail investors, Optimism’s OP Stack is gaining attention through “SocialFi” related applications. Coinbase’s Base L2 saw a surge in trading volume after the FriendTech airdrop, and Fantasy.top, an application that combines social and card concepts, also generated $6 million in fees on Blast L2 this week. This diversity of applications intensifies competition among L2s, especially in terms of market capitalization.

Optimism’s OP token is up 48% from its April lows, outperforming ARB’s 22% gain. OP tokens exceed ARB in both circulating market capitalization and fully diluted valuation. In addition, venture capital firm a16z’s $90 million investment in OP also adds to the project’s resources and credibility.

In response to the phenomenon of L2 network eroding the transaction volume of the Ethereum main network, IntoTheBlock concluded that EIP-4844 launched on March 13 played a key role in this transformation, effectively reducing L2 network fees by more than ten times. While continued competition among L2s is leading to lower Ethereum fees in the short term, it is also fostering a rich ecosystem of applications that will stimulate economic activity and provide long-term benefits.

This article: The handling fees on the Ethereum chain have dropped to a freezing point. Is the development of L2 reshaping the economic landscape of Ethereum? First appeared in Zombit.