Ethereum in Crisis: Transaction Fees Skyrocket as Active Addresses Plummet to Yearly Lows

[뉴욕=박재형 특파원] Coinpedia reported on the 23rd (local time) that Ethereum (ETH) transaction fees have recently surged, raising interest in the possibility of a market change.

According to cryptocurrency analyst Kyledoops, Ethereum transaction fees have surged by a whopping 314%, while the number of active Ethereum addresses has hit a year-to-date low.

In KyleDoops’ analysis, Ethereum’s seven-day average transaction fee has risen sharply from $0.85 in early September to the current $3.52.

Source: The Block

The main reasons for the increase in transaction fees are high fees for smart contracts and network congestion. In particular, Ethereum (ETH) transfers and stablecoin transactions such as Tether (USDT) and USD Coin (USDC) had a significant impact on the increase in fees.

These rapidly rising fees are causing users to pay more to complete transactions on the Ethereum blockchain.

Meanwhile, Ethereum’s daily burn volume has also increased significantly. As of the 21st, Ethereum’s daily burn volume reached 1,360 tokens, which is a sharp increase of about 1,600% compared to 80.27 tokens at the beginning of this month.

This burn mechanism was introduced through the EIP-1559 upgrade, and serves to increase asset scarcity by reducing the supply of Ethereum by burning a portion of transaction fees.

But amid soaring fees and burns, the number of active addresses on Ethereum has fallen to around 385,000, the lowest of the year. This suggests that small users are leaving the platform due to high fees, and it could be a larger trend in the cryptocurrency market.

Ethereum is currently trading at around $2,645 after recovering above $2,500, rising more than 14% over the past seven days.

According to Coinpedia, as solving Ethereum’s fee problem has emerged as an urgent task, competing platforms with relatively low fees, such as Solana (SOL) and Avalanche (AVAX), are emerging as alternatives.

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