Data change of gas fee after Ethereum London upgrade

As DeFi heats up, NFTs and GameFi are also on fire, gas fees on Ethereum are rising, and other public chains are rushing to launch for their pain points.

The current market share of Ethereum has fallen below 60%, but it has to be admitted that the first choice for many excellent projects to launch is still Ethereum, and the price of gas fee is closely related to each user.

The London upgrade in August changed the gas fee structure, and discussions continued. Next, this article will look back at the performance of gas fees in the past six months after the upgrade through the data of Footprint Analytics.

There is no obvious trend in gas prices in general

The London upgrade is not designed to solve scalability, so there has been no obvious trend change in the past 6 months in terms of average gas fee price and base fee price.

What it changes is the fee structure, dividing the original fee into a basic fee and a priority fee. The base fee will be destroyed, and all miners can get is the priority fee. The gas price will increase or decrease according to the utilization of the previous block, which makes the cost of the user more predictable, thereby reducing the waste caused by paying too much gas.

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Footprint Analytics – Avg Gas Price vs Avg Base Fee per Gas

It can be seen that the fees paid by users after the launch is still mainly based on the basic fee, and the priority fee for miners only accounts for about 15%. The price of individual time priority fee accounts for more than 50%, but the overall priority fee payment is relatively stable.

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Footprint Analytics – Gas Fee VS Priority Fee

Median gas price shift to the left

For users, more attention is paid to the cost of the lump sum payment. Although the gas fee has not decreased significantly from the general trend, a small gap can be seen from the median gas price. The median gas price in the last 30 days was 71.8 Gwei, and in September the median was 79 Gwei.

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Footprint Analytics – Txn Gas Price Distribution (Latest 30D vs Sep. 2021)

From the distribution of gas price bins, the data of the past 30 days has a slight deviation to the left compared with September. The proportion falling below 60 Gwei increased by 9%, accounting for 50% of users, while about 90% of transactions were below 140 Gwei. Although the change is not obvious, it does reduce the gas price for some users.

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Footprint Analytics – Txn Gas Price Distribution (Latest 30D vs Sep. 2021)

The shift to the left is inseparable from the impact of the London upgrade, and more users have chosen the EIP-1559 transaction method. According to Footprint Analytics, the proportion of users who have chosen EIP-1559 in terms of transaction methods has risen from less than 50% to nearly 80% in the past 6 months.

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Footprint Analytics – Txn Type(Share)

Looking at the gas price breakdown of the past 30 days, the median gas price of the EIP-1559 transaction method is 67 Gwei, and the median of the original method is 83 Gwei, there is a clear gap.

From the distribution of the gas price bins, the overall price trend will be smoother due to the more predictable trades that choose the EIP-1559 method. However, the gas price that chooses the original transaction method fluctuates greatly, and there is an obvious sudden increase during the period of 120 – 125 Gwei.

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Footprint Analytics – Txn Gas Price Distribution (EIP-1559 vs Legacy)

The price binning of EIP-1559 is also significantly shifted to the left than the original trading method, and more proportions fall in the low price range. 51% of users who chose EIP-1559 spent less than 70 Gwei, while only 35% of the original method. It means that EIP-1559 generally helps more users save gas fees.

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Footprint Analytics – Txn Gas Price Distribution (EIP-1559 vs Legacy)

Gas prices fluctuate regularly on a daily basis

In the final analysis, the gas fee is a reflection of the relationship between supply and demand. At present, the blockchain is in a period of rapid development, and it is difficult for the price to have a breakthrough reduction. Through the data of Footprint Analytics, it is found that the gas price has traces in different time periods, and users can save costs by avoiding the transaction peak.

From the perspective of different time periods of the day, the gas price in the period from 4:00 to 13:00 UTC in the past 3 months is low, with an average of less than 100 Gwei, and the cost of other time periods increases. The lowest price is about 76 Gwei at 11 o’clock, and the highest price is about 150 Gwei at 17 o’clock. Choosing the right transaction time can save nearly half of the cost.

Also, the variance (ie Variance) after 14 o’clock is also larger, which means that the price fluctuates more during these periods. If you want a more stable price, you can consider trading in a range with a smaller variance.

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Footprint Analytics – Gas Prices By Hour of the Day (UTC)

On a weekly basis, the lowest price was on Sunday, followed by Saturday, and the highest on Thursday. People will still prefer to trade on weekdays.

The day with the highest variance occurs on Saturday, so Sunday is a good choice for users who want a stable and low price. Choosing a non-working day and a reasonable time period can be said to be twice the result with half the effort to save the gas fee.

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Footprint Analytics – Gas Prices By Week Day (UTC)

Will gas fees be reduced in the future?

While Ethereum is upgrading in London, it is also promoting layer 2 scaling and Ethereum 2.0. After the upgrade of Ethereum 2.0, PoW will be converted to PoS mechanism, and at the same time, it will shift from single chain to multi-chain sharding.

Many people pin the gas fee reduction on this. Although the sharding technology will increase network throughput and reduce network congestion after upgrading to 2.0, there is still a long waiting process for sharding to complete.

With the current development trend of the encrypted world, people’s demand for transactions on the chain will only increase. Under such rapid growth, the relationship between demand and supply will push the gas price up.

Also don’t forget the price of ETH. The London upgrade also opened the burning mechanism, and at the latest burning rate, it is estimated that 1.8 million ETH will be burned every year. When the PoW mechanism is converted, the issuance of ETH will also drop significantly, which may cause ETH to enter deflation. If the price of ETH rises, the gas fee paid in ETH is equivalent to a passive increase.

Users who want to exercise freely in the encrypted world cannot do without the gas fee as “gasoline”. Although the “oil price” cannot be determined, smart users can choose a better transaction method and time period through data analysis.

This article is contributed by the Footprint Analytics community

The above content is only personal opinion, for reference and communication only, and does not constitute investment advice. If there are obvious misunderstandings or data errors, feedback is welcome.

Copyright Notice:

This work is the original work of the author, please indicate the source when reprinting. For commercial reprints, you need to contact the author for authorization. Any unauthorized commercial reprints, excerpts or use in other ways will be investigated for relevant legal responsibilities.

The Footprint Community is a global, mutually supportive data community where members use visual data to co-create powerful insights. In the Footprint community, you can get help, build links, and exchange learning and research about Web 3, Metaverse, GameFi, DeFi, and other blockchain-related topics. Many active, diverse, and highly engaged members inspire and support each other through the community, and a worldwide user base is established to contribute data, share insights, and advance the community.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/data-change-of-gas-fee-after-ethereum-london-upgrade/
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