Ethereum Fees Collapse By 95%: A Historic Turning Point!

The Dencun upgrade of Ethereum has led to a dramatic decrease in transaction fees on the network. Data from Etherscan reveals that a swap now costs an average of $0.39, down from $86 last year.

One year after Dencun, Ethereum fees collapse

On March 13, 2024, Ethereum deployed the Dencun upgrade, merging the Cancun updates (execution layer) and Deneb (consensus layer). This historic upgrade introduced nine improvement proposals (EIPs) primarily aimed at enhancing the scalability of the network and reducing transaction costs, particularly for layer 2 solutions.

The impact was immediate and profound. According to data from YCharts, average gas fees dropped from 72 gwei in March 2024 to just 2.7 gwei by March 12, 2025 – a 95% decrease.

In concrete terms, a swap that cost an average of $86 last year now costs only $0.39 today, according to Etherscan. Similarly, selling an NFT that required $145 in fees now only requires $0.65.

This drastic reduction in costs facilitates access to decentralized applications for users with limited capital. DeFi platforms, NFT markets, and social finance applications become accessible to a broader audience, as the network’s developers had hoped.

Paradox between technical adoption and market value

Despite this major technical improvement, the price of Ether (ETH) has seen an inverse evolution. Since the Dencun upgrade, the value of the cryptocurrency has dropped by 53%, from $4,070 in March 2024 to about $1,891 a year later, according to CoinGecko.

This paradox illustrates the complexity of the cryptocurrency market, where technical improvements do not always translate into an appreciation of value. Dominik Harz, co-founder of Build on Bitcoin (BOB), highlighted this underperformance:

“The price drop has wiped out all of the DeFi’s TVL gains since Trump’s election. Between the excitement for Solana’s memecoins and Ethereum’s recent tough months, the sector is clearly seeking a new frontier.”

Nonetheless, Ethereum’s horizon remains marked by future developments. The next major upgrade, Pectra, was deployed on the Sepolia test network on March 5, despite some initial issues. This update promises to double the available data space for layer 2, further reducing costs and increasing execution capacity.

According to Harz, although Pectra represents “a step in the right direction,” it would not be “the magic solution to Ethereum’s deeper problems,” which “is rapidly losing its position as the go-to blockchain for developers.

As Ethereum’s technical advancements continue at a steady pace, the blockchain founded by Vitalik Buterin faces significant challenges: winning back investors, convincing developers, and proving its relevance against increasingly competitive alternative solutions.