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As the NFT craze fades, Ethereum fees have dropped to a six-month low



Why did Ethereum drop today?

This decrease in Ethereum’s gas costs has many people wondering.

There was a time when just approving a transaction on the network cost a lot of money, let alone getting started with yield farming. For the first time, we’re seeing moves that cost less than a buck. What’s the answer? NFTs.

The cost of Ethereum’s gas is decreasing.

Even though the overall crypto market cap began to decline early in the year, the market for NFTs—tokens used to prove the ownership of other assets—showed no signs of slowing down at all. In January, OpenSea surpassed $5 billion in revenue for the first time. Paris Hilton, Eminem, Tom Brady, and a slew of other A-listers got in on the act.

OpenSea’s Ethereum trading volumes have dropped precipitously in recent weeks.

Ethereum volumes on OpenSea in millions. Source: Dune Analytics.

Take a step back and look at the relationship. During the span of one week, OpenSea volumes fell from $247 million to $124 million.

Between 2008 and 2010, the median gas price dropped by half, from 134 to 65 Gwei per gallon.

If we look at the price of ETH, we can confirm that the USD values in the first chart aren’t just a reflection of a drop in the value of Ethereum.

Ethereum’s average transaction cost has dropped to $15 (0.0045 ETH), according to new data from Arcane Research. This is the lowest price since August 2021.

Source: Arcane Research Weekly Report

It’s not a coincidence that ETH’s price has been falling since the beginning of the year, as it has been with other cryptocurrencies. It has been difficult for the price of ETH to stay above $3,000 in recent days. Ethereum’s NFT sales, on the other hand, are on the rise, with a recent 36.06% increase reported.

ETH/USD trades at $2,572. Source: TradingView

Fees may be decreasing due to a decrease in on-chain activity.
Higher adoption of L2 protocols like Optimism, Arbitrum, and Polygon has likely reduced on-chain transaction activity and decreased ETH fees.

A transaction on the Ethereum blockchain currently costs 0.0042 ETH, or $10.89, in gas costs. This figure was even lower during the weekend when recorded an average gas price of 19 gwei, or less than $1, per gallon. Exorbitant network costs have long been a criticism of the Ethereum blockchain, especially when the network becomes overburdened.

Decentralized financial applications (DeFi) and non-fungible tokens are among Ethereum’s drawbacks, despite its widespread use (NFTs). Ethereum gas fees hit record highs last year as a result of the hype surrounding NFTs and DeFi.

Investor interest and transaction volumes in both of these trending sectors dwindled as the overall crypto market entered a bear market, likely ushering in a new crypto winter. This reduced congestion and gas fees on the Ethereum network.


According to Music Ally, Spotify has begun testing NFTs on its platform

If a trial deployment goes well, artists may soon be allowed to market their non-fungible tokens (NFTs) on Spotify, according to Music Ally.



Spotify, the most recent tech business to join the NFT bandwagon, entered the web3 world earlier this month with the introduction of “Spotify Island” on Roblox on May 3. Spotify will now test NFTs on the platform to specifically selected US consumers, starting with a single trial selection of artists, including Steve Aoki and The Wombats.

Users will have to purchase NFTs through an external marketplace, thus they won’t be able to sell them directly. As part of the trial, Spotify has stated that it will not take a portion of the sales.

Simultaneously, customers have stated that Spotify is sending out surveys and even paying some people to talk to team members about their feelings regarding NFTs and web3. Questions concerning sentiment, cryptocurrency purchases, and why people acquired NFTs have been circulated on Twitter. Some poster responded with mockery to the queries.

Since March, when Spotify placed two job offers for working on early-stage web3 projects, rumors have circulated that the firm was interested in entering the web3. The announcement comes only days after Meta revealed that it would begin testing digital collectibles and NFTs on Instagram as well.

By the time of publication, Spotify had not responded to a request for comment from The Block.

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Square Enix intends to issue tokens and make a significant investment in Web3 gaming

By investing in blockchain gaming infrastructure, the big game producer is altering its business strategy to include a stronger NFT environment.



Square Enix announced in its first-quarter results report that as part of its medium-term business strategy in 2022, it will include nonfungible tokens (NFTs) into more game goods.

According to Square Enix’s most recent earnings report, the company manages $3 billion in assets. The company controls the Final Fantasy franchise, which it sold for $300 million on May 3rd.

According to the report, the company began testing NFTs in February this year on the Shi-San-Sei Million Arthur game. If the pilot program is a success, the game’s NFTs will be renewed for a second season, and the company will expand its NFT and blockchain activities.

SE wants to provide regulatory clarity and norms for blockchain gaming, address scalability in NFT economies, and consider forming a corporate capital venture unit, among the top priorities of its blockchain domain projects.

The company also announced that it intends to create an overseas organization that will be responsible for “issue, administering, and investing our own tokens,” implying that the company will begin to build a large gaming-token economy.

SE has been exploring its options in the blockchain gaming market with the help of Web3 gaming and metaverse venture capital firm Animoca Brands. As SE digs deeper into the ecosystem, collaboration between the two companies is expected to deepen.

Square Enix’s gaming clout, according to Animoca’s executive chairman Yat Siu, will only help the company establish a blockchain gaming presence. On Monday, he said to Cointelegraph,

“Square Enix has long talked about the possibilities of blockchain games, so it understands it better than most of the traditional gaming titans.”

The third objective of the report’s medium-term business strategy is to invest in and monetize blockchain, artificial intelligence (AI), and cloud computing. This aligns with CEO Yosuke Matsuda’s stated desire in January to increase his company’s involvement in such technologies.

Despite a broad cryptocurrency market dip in 2022, the appeal of Web3 and NFT gaming has remained strong. On Saturday, according to market tracker DappRader, there were roughly one million daily active gamers, nearly the same as on January 1.

Gamers, on the other hand, aren’t spending as much as they used to, with total sales volume for NFT game items falling 88 percent from $70 on January 1 to $8.7 million on Saturday.

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Ukraine’s Ministry of Digital Transformation has approved a charity NFT initiative to aid military operations

On Thursday, Mykhailo Fedorov, Ukraine’s Vice Prime Minister and Minister of Digital Transformation, tweeted his support for Avatars for Ukraine, a non-fungible token (NFT) project that benefits Ukraine’s humanitarian and defense efforts.



The project includes 70 digital artworks based on Ukrainian imagery and resistance to Russian forces that evolved as a result of the Russia-Ukraine war. All earnings from the sale of digital art go to support Ukrainian war efforts. The Ukrainian Ministry of Digital Transformation has approved Avatars for Ukraine, and the first NFT will be released on May 19.

This isn’t the first time Ukrainian officials have used blockchain technology to help fund war activities. The Ukrainian government opened a website in April this year where people could purchase and trade NFTs to support Ukraine’s military efforts, as well as raise over $100 million in crypto donations.

Avatars for Ukraine also joins a growing trend of NFT projects assisting in the donation of monies to charity, with some or all of the proceeds of NFT art going directly to the charity.

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