Ethereum gas fees, once a notorious pain point for users during the 2021 DeFi and NFT booms, have recently dropped to unusually low levels.
ETH Low Gas Fee
As of February 26, 2025, the cost of a simple transfer on Ethereum’s mainnet has fallen to as little as $0.67. Several reasons contributing to this decrease include: fragmented liquidity of Layer 2, lack of new trend to boost activity on the network, and the overall sluggish crypto market.
Source: ETH Gas Tracker
Layer 2 Liquidity Fragmentation
Layer 2 (L2) solutions—such as Arbitrum, Optimism, and Base – were designed as critical scaling mechanisms for Ethereum. By processing transactions off-chain and settling them on the mainnet, L2s promised to reduce gas fees and boost transaction speeds, addressing Ethereum’s inherent scalability limitations.
According to Cointelegraph, L2 attracts a significantly higher transaction volume compared to Ethereum’s main chain. This reflects a clear trend of users shifting towards more scalable solutions for their blockchain activities.
Data from Token Terminal shows that network fees peaked at $35.5M on March 5, 2024, the highest level of the year. However, just by this week, the network fees went down significantly to $12.6M.
Source: Token Terminal
This is a result of L2s returning low fees to Ethereum’s mainnet. Several criticisms about L2 returning low fee claimed Optimism paid just $14,000 to L1 in Q3 2024 while collecting $2.9 million in sequencer fees—a ratio showing L2s retain most revenue, remitting only about 0.5% to L1.
Are Layer 2s Still Necessary When Gas Fees Are This Low?
Currently, Ethereum gas fees are super cheap and sometimes under $1 for a transaction. Layer 2s like Arbitrum and Optimism were built to fix high fees and slow speeds by handling transactions off the main Ethereum chain. They worked: fees dropped because L2s took the pressure off. But with mainnet fees already so low, you might wonder—do we still need L2s?
This advantage is not as significant for basic tasks, as Ethereum can be used directly without incurring significant costs. However, L2s continue to be valuable for heavy users such as DeFi traders or NFT minters, where the need for fast and inexpensive transactions is paramount. So, while L2s aren’t as critical for everyone when fees are low, they’re still handy for keeping Ethereum scalable and speedy for the big players.
Lack of Trends to Drive Activity: Ethereum vs. Solana
Compare this to Solana, which has ridden successive waves of meme coin trends in 2024 and 2025, fueling network activity and revenue (e.g., $123.2M in monthly fees on February 26, 2025).
Source: Token Terminal
In fact, Solana witnessed a hype from $TRUMP, which helps boost the performance of the overall network. On the day it debuted, Solana’s price surged by 19.10%, reaching a monthly high of $295.34 on January 19. Over the course of the week, it saw a 33.1% increase, highlighting the strong correlation between meme coin launches and the performance of Solana.
Source: Coinmarketcap
On the contrary, Ethereum doesn’t have a big new trend or popular app to boost activity like Solana. The DeFi craze has died down, NFTs aren’t as hyped anymore, and nothing new has come along to replace them. Thus, without any key players, transactions have slowed, and gas fees have dropped as a result.
A Sluggish Market Keeps Ethereum Stagnant
The overall crypto market slowdown is also a factor. Ethereum got a boost from ETF approvals and the Dencun upgrade, but by 2025, enthusiasm has faded. Ethereum’s price hasn’t kept up with Bitcoin, and its market cap isn’t growing much. When the market is slow, people trade less, use DeFi less, and make fewer speculative bets—all of which used to drive up Ethereum’s gas fees. With fewer users competing for transactions, fees naturally stay low.
Source: Coinmarketcap
Gas Limit Increase: More Space, Less Pressure
Ethereum’s gas fee drop is also due to changes in how much data each block can handle. According to Decrypt, by late 2023, developers decided not to raise the gas limit beyond 30 million gwei, but previous increases had already made blocks bigger. This means there’s more room for transactions, so even when activity rises a little, there’s less competition to get included in a block.
On top of that, Layer 2 solutions are handling more transactions, reducing the load on Ethereum’s main network. As a result, the mainnet rarely gets overcrowded, keeping gas fees at their lowest levels in years—hitting a five-year low in early 2025.
