Understanding Ethereum Gas Fees and Market Dynamics

The debate surrounding Ethereum's gas fees has shifted from being too high to becoming exceedingly low, thanks to rollups. Despite occasional spikes, this is a normal occurrence in a wholesale market during peak demand. The modular scaling philosophy views blockchains as purveyors of secure block space, auctioned to the highest bidder. Monolithic chains aim to serve everyone equally, but this is unsustainable for critical financial transactions. Pricing supply below demand requires constant capacity additions. However, on a modular chain, individual users seeking maximum security and wholesale providers like rollups can absorb short-term fee spikes. In the future, most gas fees may be abstracted from end-users, particularly on retail transactions. This shift towards a modular approach allows for more stable market dynamics and competition among Layer-2 solutions.