Why are Ethereum’s gas fees falling?
After all, it wasn’t that long ago that merely approving a transaction on the network cost an arm and a leg, let alone starting to swing your digital scythe in a yield farm. We’re now seeing moves for less than ten dollars.
The answer? NFTs.
Ethereum Gas Fees Falls
Even though the overall crypto market cap dropped early in the year, the market for NFTs—tokens used to prove ownership of other assets—showed no signs of slowing down. In January, OpenSea set yet another sales record, reaching $5 billion in revenue. A slew of celebrities, including Paris Hilton, Eminem, Tom Brady, and a slew of others, joined the fad.
Indeed, Ethereum volumes on OpenSea have plummeted during the last few weeks.
Ethereum volumes on OpenSea in millions. Source: Dune Analytics.
When you take a step back and look at the relationship, it becomes even more apparent. Volumes on OpenSea dropped from $247 million to $124 million from February 1 to February 6.
At the same period, the median gas price fell by half, from 134 gwei to 65…