The Ethereum network has seen a significant drop in average transaction fees, hitting record lows, as more activity shifts to Layer-2 (L2) networks within the chain.

Data from Ultrasound.money indicates that the average gas has fallen to 4.81 Gwei, marking the lowest level since the completion of the Merge event in 2022. Market analysts attribute this decline to the growing utilization of L2 networks, particularly following the implementation of the Dencun upgrade. This upgrade notably reduced fees for L2 networks, making transactions on the base layer less appealing.

According to insights from the blockchain analytical platform IntoTheBlock, there has been a notable increase in transactions settled on Ethereum Layer 2s. In the previous month, the three largest L2s collectively accounted for a record 82% transaction share of all Ethereum transactions.

Meanwhile, Arbitrum has experienced significant transaction growth, surpassing 2 million daily transactions on May 8, a substantial increase from the early March average of 1 million.

Data from L2beats further illustrates the transaction throughput of Base and Arbitrum, averaging 30 and 20 transactions per second, respectively, compared to Ethereum's 13 transactions per second during the same period.

In a separate analysis by CryptoQuant, it was revealed that Ethereum has transitioned to an inflationary state post the Dencun upgrade, resulting in decreased gas fees and a reduction in its burn rate. This shift challenges Ethereum's previous narrative of being 'ultrasound money,' with the network experiencing a decrease in total ETH supply and a record low daily amount of ETH burned, according to UltraSound.Money data.