Ethereum Gas Prices Stabilize Under EIP-1559, L2 Networks Drive Adoption

Ethereum's gas prices are measured in gwei, which is one billionth of one ETH. This unit has become standard for expressing Ethereum gas prices, making it easier for users to understand and estimate transaction costs.

In August 2021, EIP-1559 replaced the old auction model with a dynamic base fee that adjusts per block, making gas costs more predictable for wallet users. The base fee is burned permanently, removing ETH from circulation and creating deflationary pressure tied directly to network usage levels.

Layer 2 networks such as Base and Arbitrum operate at effective gas prices below 0.01 gwei, handling most retail activity at under $0.05 per transfer. Major events like NFT mints or memecoin launches can temporarily push fees above 100 gwei on mainnet.

The decline in mainnet gas fees, from averages above 30 gwei in 2023 to below 1 gwei in quiet periods of 2026, reflects a structural migration rather than reduced demand. Total Ethereum ecosystem transaction volume has grown, but the composition has shifted heavily toward L2 execution.