The Ethereum gas usage increased in March as ETH surged to $3.500 and the ERC-20 token generation from last month was 125% above the February levels so let’s read more in today’s latest Ethereum news
The developers continue building new projects on other blockchains. The Ethereum gas usage increased by 13% in March from the previous month amid greater demand for the block space as per the DEFI analytics firm HashEx. The gas demand said that the market observers played a huge role in pushing ETH above $3,500. Some of the demand came from higher ERC-20 token generation and the rise of layer 2 applications. Layer 2 refers to protocols that operate atop the ETH network such as Optimism and Arbitrum. The gas refers to the amount of ETH as the native coin of Ethereum and is required for a user to interact with the network.
The gas fee varies and it is determined by the miners that depend on factors like supply and demand with the need for computing power to process the smart contracts with the total number of transactions and the complexity of calculations when performing the smart contract functions. The ETH prices reached over $3500 alongside the rise in gas usage and broke the $2000 to $3000 range. Other catalysts for that run were a recovery in BTC prices that led to a broader crypto market bounce with a successful testnet merge before Ethereum’s shift to PoS consensus design.
Some analysts pointed out that the high gas usage is often a positive sign regardless of what the ETH prices do. Adam O’Neill who is the chief marketing officer at exchange Bitrue noted:
“Ethereum gas usage has increased in recent weeks. This proves the high demand for Ethereum block space even as the market endures a bearish trend.”
The CEO of KuCoin Johnny Lyu shared the sentiment:
“Gas demand will grow along with the expansion of applications of the Ethereum blockchain, which will also increase the demand for ETH. This is a very typical supply-and-demand relationship.
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Investors entered the accumulation stage from the second week of March and are watching the rise in prices of cryptocurrencies, so the cost of transactions at the end of March did not reach record levels; instead, only a correlation with the cost of Ethereum could be observed.”
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