Ethereum’s gas fees have dropped by 95% in the year following the Dencun upgrade, significantly reducing transaction costs. The upgrade, which went live on March 13, 2024, combined the Cancun upgrade on the execution layer and the Deneb upgrade on the consensus layer, introducing nine Ethereum Improvement Proposals (EIPs). The main goal was to improve scalability and lower fees, particularly for layer-2 networks. According to YCharts, Ethereum’s average gas fee has fallen from 72 gwei in 2024 to just 2.7 gwei as of March 12, 2025. Etherscan data shows that an average swap now costs $0.39, while an NFT sale averages $0.65. A year ago, these transactions cost users $86 and $145, respectively.
Despite the lower fees, Ether’s price has dropped by 53% since the upgrade. In March 2024, ETH was trading at over $4,070, but as of March 13, 2025, its value has fallen to around $1,891, according to CoinMarketCap. Dominik Harz, co-founder of Build on Bitcoin (BOB), pointed out that the recent drop erased all DeFi total value locked (TVL) gains since Trump’s election. He also noted that Ethereum has faced a challenging few months, while Solana has seen increased activity, particularly with meme coins.
Ethereum’s upcoming Pectra upgrade has also encountered issues. The upgrade was deployed on the Sepolia testnet on March 5, 2025, but developers soon noticed errors, including blocks being mined without transactions. Ethereum developer Marius van der Wijden confirmed that a fix was deployed, but the same error was later triggered again by an unknown user, causing further disruptions. The development team eventually stabilized the testnet, allowing transactions to resume normally.
Harz said that while these testnet problems are delaying the mainnet launch, they are not Ethereum’s biggest concern. He explained that Pectra will increase data availability for layer-2 networks, reduce costs, and improve execution capacity. However, he argued that Ethereum is losing its status as the leading blockchain for developers and that Pectra alone will not solve the deeper problems the network faces.
The sharp reduction in gas fees is a major improvement for users, but Ethereum’s price decline and technical challenges raise concerns about its long-term position in the market. While the network continues to evolve, its ability to maintain dominance in the crypto space remains uncertain.
