Enthusiasm in the crypto market died down when hit by the recent sustained market downturn, as clearly shown by Ethereum's (CRYPTO: ETH) on-chain fundamentals.
What Happened: Ethereum is seeing significantly less use than it has on average over the last two years. The seven-day average of Ethereum's total gas usage just reached a 14-day low, according to a Tuesday tweet by Glassnode Alerts — the on-chain fundamental divulgation Twitter Inc . (NYSE: NYSE:TWTR) profile of blockchain analytics firm Glassnode.
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Gas represents the cost to send out a transaction that increases with the complexity of any given transaction. If your transaction has multiple inputs, stores data on-chain or interacts with smart contracts — especially complex ones — then it will cost significantly more than a simple transaction would.
This peculiarity of the gas mechanic makes this data point even more valuable when judging how active Ethereum's user base is, since a steep decline in gas points to significantly lower decentralized application (DApp) usage.
This fall in gas usage is presumably also attributable to how much NFT trading volumes have decreased, as highlighted by OpenSea market data. Overall Ethereum usage fell by a considerable amount, with daily transactions falling to just over 994,100 — a value according to YCharts data not seen since late 2020.
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