Why are Ethereum fees so high in 2025?

The Ethereum network, as a pioneer of smart contracts and ERC-20 based projects, has expensive transaction fees and slow speeds compared to other blockchains.

In the past few years, its exponential growth has affected the price of fees. Before the EIP-1559 update, fees were processed on a first-come, first-served basis based on the highest bidder, while the update transformed it into an automatic system.

As 2025 progresses, Ethereum fees are showing significant changes. The implementation of the consensus layer has brought some relief, with average transaction fees fluctuating between 5 and 15 dollars during normal activity periods, soaring to 25 to 40 dollars during high traffic events. Layer 2 solutions have become crucial, with Optimism, Arbitrum, and zkSync offering significantly lower fees ranging from 0.15 to 0.45 dollars.

The EIP-1559 update has greatly improved fees, although they remain expensive during high-traffic moments - costs are now distributed across the network instead of using the previous bidding system. The introduction of the prototype danksharding (EIP-4844) further enhances the network’s ability to handle increased transaction volumes, reducing costs by approximately 45% compared to levels in 2023.

Although significant improvements have been made through protocol upgrades, Ethereum fees remain a challenge for retail users participating in DeFi applications, especially for smaller transactions where fees can account for a large proportion of the total value.

If you have ever traded Ethereum tokens or any Ethereum network tokens based on ERC-20, you must have noticed a significant difference of this blockchain compared to others: the transaction fees on Ethereum are extremely high.

Moreover, as the network attempts to expand and cope with the growing demand, these fees seem to only get higher. But what causes Ethereum fees to be so high, and are there any solutions to this problem?

In this article, we will take a detailed look at Ethereum fees, why they seem to be rising increasingly, and how to address this issue.

Expected Ethereum fees in 2025

As 2025 approaches, the Ethereum network fees show significant development compared to previous years. The implementation of the consensus layer (formerly known as Ethereum 2.0) has brought some relief to the fee structure, although it has not completely resolved the issue.

Current data shows that during normal network activity, average transaction fees fluctuate between 5-15 dollars, and during peak demand, they can soar to 30-50 dollars - significantly lower than the extreme fees of 100+ dollars experienced in previous years, but still higher than those of competing layer solutions.

Layer 2 scaling solutions have become a necessity for Ethereum users by 2025:

The introduction of the prototype danksharding (EIP-4844) has improved the network’s ability to handle increased transaction volumes, avoiding the extreme fee spikes that occurred previously. This improvement provides users with better fee predictability while maintaining network security.

Despite these advancements, Ethereum fees in 2025 will still be a key consideration for users, especially for smaller transactions, where fees may still represent a significant proportion of the total transaction value.

2025 Ethereum Fee Overview

The fee situation of Ethereum in 2025 presents a complex reality. Although significant improvements have been made through protocol upgrades, network congestion remains a challenge as adoption continues to expand.

Current indicators show that during standard periods, transaction fees average between 8-12 dollars, and during high-traffic events (such as major NFT launches or DeFi liquidity migrations), they can spike to 25-40 dollars. This is an improvement compared to historical peaks, but it remains expensive for smaller transactions.

Layer 2 solutions have become an important part of the Ethereum ecosystem:

The implementation of the prototype danksharding (EIP-4844) provides meaningful relief, allowing layer 2 solutions to publish transaction data more efficiently, reducing costs by about 45% compared to 2023 levels.

Despite some progress, Ethereum’s fee structure continues to pose accessibility challenges, particularly for retail users participating in DeFi applications. Multiple platforms are now actively promoting cross-chain interoperability solutions to alleviate these constraints while maintaining security.

Why are the fees on Ethereum so high?

The Ethereum network is the first network for smart contracts and based on ERC-20. Compared to other blockchains, its transaction fees are very expensive, but the transaction speed is extremely slow.

In the past few years, its exponential growth in scale has also had a significant impact on fee prices. Before the EIP-1559 upgrade made it an automatic system, these fees were prioritized according to the highest bidder’s order.

But the main reason for the surge in fees over the past two years is due to the rise of DeFi. Since Ethereum created smart contracts, most DeFi projects are based on its blockchain, so it can be said that all its tools rely on the network to function—staking, lending, yield, liquidity pools, yield farming, NFTs, etc.

The update of EIP-1559 has greatly improved the issue of high fees, although they are still expensive and even more so during times of high traffic—now, the costs across the entire network are diluted, rather than using the previous bidding system.

Ethereum 2.0 and other upcoming new technologies bring hope for improving this issue, but according to co-founder Vitalik Buterin, another substantial innovation may take years.

If you have ever traded Ethereum tokens or any ERC-20 based tokens on the Ethereum network, you have certainly noticed that, compared to other blockchains, this blockchain has some very distinct features: Ethereum transaction fees are extremely high.

As networks attempt to scale while responding to growing demand, they seem to only get more expensive. But what causes the fees on Ethereum to be so high, and is there a solution to the problem?

In this article, we will provide a detailed overview of Ethereum fees, how they have been increasing, and how to address this issue.

What is Gas fee?

The operating costs of the Ethereum network seem to be rising day by day. It is not uncommon for transaction costs to be $30, $40, and sometimes even $100—regardless of the actual transfer value.

This factor is directly related to gas fees, which play an important role in the Ethereum network.

Gas fees are related to the work done on the network. This measurement of work is called gas units. Since Ethereum can only process a limited number of gas units at a time, those who mine using hardware in the network must choose the primary operations they will execute, otherwise it could overwhelm the blockchain and cause it to halt - this has not happened so far.

This so-called gas device filter takes into account how much each miner participating in the network will earn from the transaction, a factor marked as the gas price. Therefore, those who attempt to prioritize their transactions in front of others must pay a higher gas price for it. Conversely, if you are not in a hurry to send or receive a transaction, the order will remain in several low-return transaction pools until a miner selects it. However, this approach carries the risk of transaction cancellation, in which case you will have to complete the order process again.

The challenges faced by Ethereum in terms of transaction fees are not coincidental. Recently, the EnthUM network has had an average daily transaction volume of $1.2 billion, peaking at $1.7 billion in May 2021. The trading volume is extremely large.

However, the increasing popularity of Ethereum’s cryptographic technology is not the only reason for the high demand for this network. There is also DeFi, which, as a thriving crypto ecosystem, can bear a significant responsibility.

How DeFi is causing Ethereum fees to rise

Actually, the principle is very simple: because most DeFi still operates on the Ethereum network. As DeFi grows, the demand for the Ethereum blockchain naturally increases.

In the past two years, the booming development of the DeFi market has led to a significant increase in trading volume. As more users attempt to gain priority transfer rights, the overall gas prices in the network have risen accordingly. Within the consensus range of average gas fees, this has made Ethereum fees even more expensive.

Of course, the operation of the Ethereum network does not solely rely on transaction volume: this project is groundbreaking primarily because of the creation of smart contracts, which allows the DeFi ecosystem to continue to develop. Because in addition to the demand for transactions, DeFi also makes the network congested through several existing functions in decentralized finance: staking, lending, liquidity pools, yield farming, lotteries, NFTs, and so on.

As a result, the Ethereum transactions + DeFi transactions + DeFi smart contracts and platforms have generated a snowball effect of increasingly high fees. With the growing development of these projects, more and more ERC-20 based tokens are emerging, which will only exacerbate the already high fees problem on Ethereum.

Considering these factors, what is the solution?

EIP-1559 update protocol, or London hard fork protocol

During years of development, the London hard fork was officially released in August 2021. This protocol introduced several major improvements and gradually incremented to the Ethereum network, including how to define network fees.

The protocol aims to enhance trading efficiency while also highlighting the advantages of Ethereum, making other competitors pale in comparison. Previously, there was an auction system in the blockchain, as mentioned earlier, that could determine which transactions would go through each block.

The more users are willing to pay, the higher the Ethereum fees will be. Generally speaking, the more users there are using the network, the higher the network fees will be. Therefore, users must take into account the level of congestion in the network at that time to decide whether they really want to make a transaction at that moment.

When Ethereum launched the London Hard Fork, this auction system was replaced by an automated trading structure that easily collects fees without the need for manual input. In addition, a tipping mechanism was introduced to provide a peer-to-peer connection between users and miners—despite the new automation system, users are still willing to pay more fees for transactions, paying miners directly. Additionally, there is an option to set a limit fee to cancel transactions when prices are too high.

People firmly believe that this new system will make Ethereum transactions cheaper. Although transaction fees have been reduced and users can now choose to set price limits, Ethereum is currently still the network with the highest operating costs.

However, there may be more complete solutions that can permanently improve the high fees of Ethereum.

Summary

Since its launch in 2015, the Ethereum network has developed quite well, paving the way for smart contracts to dominate the mainstream and change the world’s view on cryptocurrencies and their utilities.

Despite the London hard fork updating the protocol, which has increased network usage and fees, Ethereum needs to continuously develop and improve to compete with alternatives in the market and maintain its market position. Network speed congestion is another issue that must be addressed, and Ethereum has tackled this problem in its upcoming 2.0 update (now referred to as the consensus layer). However, if co-founder Vitalik Buterin’s prediction is correct, it may still take 7 years before Ethereum 2.0 can officially go live.

Regardless, as the second most popular network since its launch, Ethereum’s popularity is evident to the market and users — new users are emerging every day, and the trend has been consistently upward. However, with the increasing speed of blockchain transactions and decreasing costs, Ethereum will reach a whole new level — becoming an open, high-performance industry giant, and perhaps one day it will become the world’s leading crypto platform.