Ethereum (CRYPTO: ETH) was trading at $2,567 at the time of writing, nearing its all-time high of $2,615 recorded on April 22.
What Happened: As the second-largest cryptocurrency by market cap continued to trade higher, gas fees on the network dropped to a three-month low, according to data from Santiment.
Analysts at Santiment pointed out that gas fees were back at the sub $10 level, recording an average level of $8.14.
“This is obviously encouraging, with $ETH holders being able to confidently move their holdings without fear of such heavy incurred costs,” they wrote on Twitter.
Why It Matters: Expensive gas fees on the network have led to other blockchains, like Binance Smart Chain, becoming popular alternatives to the Ethereum network for daily transactions.
With that being said, the majority of DeFi related development remains tied to the Ethereum blockchain, and holders made use of the opportunity to move their tokens across the ecosystem.
Some users suggested that the significant reduction in gas fees was a result of the Berlin upgrade finally taking place and several protocols using layer 2 solutions like Polygon (MATIC).
However, Peter Chan of OneBit Quant told Coindesk that the improvement in fees was actually a result of traders building “bots” by collaborating with Ethereum miners.
Chan said they had created a tool called “MEV-geth” that floods the network with transactions in the amount of 0 ETH to spot a preferential transaction sequence.
“Basically, some of the bots decided to work with miners, and there are immense amounts of zero-gas transactions mined,” said Chan, explaining that this dynamic provides an advantage for traders.
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