Ethereum transitioned from the proof-of-work to proof-of-stake protocol on September 15, 2022, ushering in a new era in the crypto sphere. The Merge considerably reduced energy consumption by 99% making the Ethereum network environmentally friendly. It was touted that the issue of high gas fees to initiate transactions could considerably reduce post the Merge. However, things seem to be otherwise, as the Merge has done little to nothing to contain the high gas fees on the Ethereum network.
Ethereum gas fees have risen 31.3% in October 2022 despite the successful initiation of the Merge, data shows. In September (before the Merge), the average gas fee was around 17.1 gwei. Moreover, in October (after the Merge), the average gas fee increased to 22.5 gwei.
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On October 10th alone, the highest recorded gas fees on the Ethereum network reached 37.6 gwei. The network has turned more expensive post the Merge and has not solved the high gas fees issues.
Ethereum Network Experience An Increase in Smart Contracts
Post the Merge, the number of ERC-20 tokens created on top of the Ethereum network increased by 33.4% in October. ERC-20 tokens created on the network in September were 10,714 and jumped to 14,295 the next month. The increase in on-chain activity is the sole reason for the gas prices to experience a jump despite the Merge.
The average transactions on the network stood at 33 million in September but spiked to 34 million in October. The network saw a spike of 1,100,726 in volume transactions last month congesting its network and in return, making the gas prices shoot up.
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A reduction in gas fees is unlikely as transactions on the network have increased post the Merge and not decreased. Users willing to initiate transactions need more money to shell out on gas fees than previously.
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At press time, ETH was trading at $1,262 and is down 0.1% in the 24 hours day trade. It is down 74.2% from its all-time high of $4,878, which it reached in November last year.