Ethereum Gas Fees Plummet 95% Following Dencun Upgrade

According to Cointelegraph, Ethereum has experienced a significant reduction in gas fees, dropping by 95% in the year following the Dencun upgrade. This upgrade, implemented 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 primary aim was to enhance scalability and reduce transaction costs for layer-2 networks. Data from YCharts indicates that Ethereum's average gas fee has decreased from 72 gwei in 2024 to just 2.7 gwei as of March 12, 2025. Previously, users faced an average swap cost of $86 in fees, while non-fungible token (NFT) sales averaged $145 in gas fees. Currently, Etherscan data shows that an average swap costs $0.39, and an NFT sale averages $0.65. Despite the reduction in gas fees, Ether (ETH) has seen a 53% decline in price since the Dencun upgrade. In March 2024, ETH was trading above $4,070, but by March 13, 2025, it had dropped to approximately $1,891, according to CoinGecko data. Dominik Harz, co-founder of hybrid layer-2 Build on Bitcoin (BOB), commented on Ethereum's recent performance, stating that the network has "underperformed." He noted that the recent price drop erased all DeFi TVL gains since U.S. President Donald Trump's election, highlighting the industry's search for a new, sustainable, and secure frontier for DeFi. The upcoming Pectra upgrade, which rolled out on its final testnet, Sepolia, on March 5, encountered issues with error messages and empty blocks being mined. Ethereum developer Marius van der Wijden confirmed that a fix was deployed, but an unknown user later triggered the same error, causing further complications. The development team has since stabilized the testnet and successfully processed transactions. Harz mentioned that while these testnet issues are "disrupting the mainnet launch," they are not Ethereum's biggest challenges. He emphasized that once Pectra goes live, it will double the available data space for layer-2s, reduce costs, and increase execution capacity. However, Harz cautioned that Ethereum is rapidly losing its position as the preferred chain for builders, and Pectra is not a comprehensive solution to its deeper issues.