NFT Marketplaces Witness Dramatic Reduction in Ethereum Fees
The Ethereum gas consumption landscape is changing significantly as NFT (Non-Fungible Token) marketplaces no longer dominate the network’s gas consumption. According to a report by Nansen, a crypto analysis platform, NFTs have fallen behind as they make the most in Ethereum gas fees.
In particular, while Ethereum’s transition to proof-of-stake, in an event known as “The Merge”, is expected to face high gas prices, investors are now explore alternatives like Cardanowhich boasts greater cost efficiency following the recent Hydra upgrade.
Ethereum’s Gas Consumption Shift
According to data revealed by Nansen on Friday, there is currently a notable shift in Ethereum’s gas consumption patterns. NFT marketplaces, which once held the top spot, now account for just 3% of total gas consumption.
Surprisingly, decentralized exchange (DEX) Uniswap has emerged as the primary gas consumer, representing 31.99% of gas consumption. This shift indicates a diversification in Ethereum’s transaction activity and a reduction in NFT-related gas usage. Nansen noted:
Gone were the days when NFTs topped Ethereum’s gas consumption charts. This week, of the top 20 gas consumers, OpenSea and Blur accounted for less than 10% combined. And against all gas consumers, the NFT marketplaces were just over 3%. Uniswap, by contrast, was 10 times more – 31.99%.
This significant drop in NFT-related gas consumption can be attributed to various factors, including network congestion caused by an influx of meme coin trading, especially the recently hyped frog-themed meme coin PEPE.
This increase in meme coin transactions resulted in increased gas prices, prompting users to explore alternatives and easing the burden on NFT marketplaces.
Navigating the gas crisis
Ethereum’s gas crisis has persisted despite The Merge, which is said to improve scalability and reduce gas fees by migrating the network to a proof-of-stake consensus model. In response, some investors have sought solace in blockchain platforms that offer cost-effective alternatives.
With its recent Hydra upgrade, Cardano has gained attention for its ability to handle transactions more economically. The implementation of Hydra’s layer-2 scaling solution has positioned Cardano as a viable option for users seeking relief from Ethereum’s high gas prices.
The recent decline in NFT marketplaces’ gas consumption marks a significant turning point in Ethereum’s gas crisis. As decentralized finance protocols (DeFi) and other transaction-heavy platforms take the lead in gas consumption, the burden on NFT marketplaces has lessened.
However, the wider Ethereum community expects the implementation of updates on the mainnet to address the persistent gas issues and improve the scalability of the network.
Meanwhile, Ethereum’s price has experienced an upward trend over the past week, up by 2.4%. ETH has rallied from a low of $1,771 seen last Friday to trade as high as over $1,800 later this week.
Ethereum’s market cap has also recorded big gains in the last 7 days. ETH’s market cap has risen over 2% from a low of $215 billion to a high of $218 billion on Friday. Meanwhile, ETH’s daily trading volume has plunged throughout the week from a peak of $10 billion last Friday to $5.5 billion over the past 24 hours.
Interestingly, the asset has picked up where it left off, gaining 1.1% over the past 24 hours. ETH is currently trading just above $1800 with a price of $1811 at the time of writing.
Featured image from Unsplash, chart from TradingView
