This week, Ethereum’s median transaction fee fell to a record low, according to on-chain metric tracker Token Terminal. The reduction follows the Fusaka upgrade in December, 2025, but it was not solely caused by it.
Median Transaction Fees Sharply Decline; What Does It Mean?
The drop could have been mainly caused by how Ethereum’s fee system automatically adjusts prices. The lasting effects from earlier upgrades and a period of low competition between transactions played an important role.
In short, median transaction fees represent the 50th percentile of fees paid over a given interval. They are driven mainly by how Ethereum’s base fee adjusts over time (under EIP-1559), not by short-term congestion spikes.
Under EIP-1559, Ethereum aims to keep blocks about half full. When they are less busy, the system automatically lowers the base fee in the next blocks. Since most transactions pay little or no extra tip and are included at the base fee, the median transaction fee moves up or down with these automatic adjustments.
When blocks stay ‘underused’ for a while, meaning less congestion, median fees fall even if a few transactions pay very high fees. Thus, short bursts of heavy activity don’t move the median value, keeping median transaction fees a steady indicator of how busy the network really is.
Additionally, long-term changes in how the network works can make this effect stronger
Benefits for Ethereum and ETH
There are several advantages that the Ethereum network can boast due to the lowered median fee.
Firstly, they reduce the cost floor for ordinary transactions and contract interactions, making the network more attractive to both builders and users.
Since the Dencun upgrade (EIP-4844), a significant portion of data-intensive demand has shifted away from execution gas, reducing baseline competition for blockspace.
Consequently, the base fee dropped more readily during periods of average demand. Leon Waidmann, Head of Research at Onchain Foundation, agreed, quoting the prior economic ‘unusability’ of Ethereum.
The nature of the transactions themselves is also important in this case. When most transactions are everyday transfers or contract calls that try to keep costs low, people don’t add much extra tip, and fees stay close to the base level.
From an economic point of view, low fees simply mean there is room for activity to grow before prices start rising. Under EIP-1559, ETH burn scales with demand. Lower burn during comparatively ‘quiet’ periods delays it until activity returns.
Lastly, lower fees make on-chain data easier to read. When the median fee is low, it means blocks are not crowded. If demand rises, the median will rise with it. Short bursts of high-fee activity still happen, but they do not affect the median. This makes it easier to tell the difference between low overall activity and brief congestion from specific events.
