Ethereum L1 gas prices are nowhere as high as they were from 2020-2022 during the last bull run, thanks to Layer 2 rollups and EIP-1559

One of the biggest concerns of Ethereum during the last bull run were excessively-high fees. I mean, L1 fees are still high, but they're nowhere close to being as high as they were during the previous bull run. From July 2020 to Feb 2022, gas prices were often above 100-200 Gwei ($10-20 ETH transfers and $100-200 ERC-20 swaps). After Feb 2022, gas prices started declining greatly and settled below 50 Gwei average. Unlike the previous bull run, the 200+ Gwei busy days of 2021 have disappeared. And on many days (including today), it costs more to transfer BTC than ETH.

https://preview.redd.it/nhb5z7f0gemc1.png?width=1920&format=png&auto=webp&s=d2541baa8b40b812ef3f0e2cebda5d221055c659

Ethereum fees have been lower even though Layer 1 is just as busy as before. In fact, all L1 Ethereum blocks have been maxed out (in gas usage) since The Merge, with daily gas usage consistently just above 100% of the combined block target gas usage for the day.

So what changed? The biggest difference is that much of the activity has shifted to Layer 2s. L2 activity grew in 2022 and surpassed L1 in Sept 2022. Many applications with high activity have permanently migrated to L2s.

In addition, EIP-1559 also allows for block size to be much more elastic than before by allowing the block to temporarily double in gas usage at the cost of fees being 12.5% more expensive in the next block.

Lastly, the Dencun upgrade planned for Mar 14th is expected to further lower prices for Layer 2 rollups, likely to shift even more activity to L2 rollups and further alleviate L1. People should be using L2 rollups whenever possible because L1 isn't meant for direct use. It's meant to be a settlement layer for the L2 rollups.

Edit: Of course I picked the highest gas price day since May 2023 to post this. FML.