Ethereum gas fees used to cost more than rent.

In 2022, gas fees on Ethereum were so bad that people paid $44,000 to mint two NFTs worth $5,800, $3,850 in gas for a $275 JPEG, and $1,700 just to send $100 between wallets.
$157 million was burned in gas in a single afternoon during the Otherside mint, when Bored Ape Yacht Club sold 55,000 virtual land plots and crashed the entire Ethereum network.
None of that was a glitch.
That's just how Ethereum worked.
Here's how gas fees actually work:
Every action on Ethereum requires work from the network.
Sending ETH, swapping tokens, minting NFTs all cost "gas."
When millions of people try to use the network at the same time, they're bidding against each other for limited space in each block.
A block is just a batch of transactions that gets added to the chain.
There's only so many that fit.
Highest bidder gets in first.
Everyone else waits or pays more.
During the NFT supercycle, that bidding war went diabolic.
Average fees hit $53 on normal days.
Peak days reached $196 per transaction.
Gas prices spiked to 480 gwei.
For context, gwei is how gas is measured on Ethereum and one gwei equals one billionth of an ETH.
At 480 gwei, even a simple transfer could cost hundreds of dollars.
Ethereum was unusable unless you were willing to overpay.
Three upgrades changed everything:
EIP-1559 added a system where the base fee goes up or down depending on how busy the network is.
A portion of every fee gets burned permanently meaning that ETH is destroyed and removed from circulation forever.
This made costs more steady but didn't make them cheap.
The Merge switched Ethereum from Proof of Work to Proof of Stake.
Before, miners had to race to solve complex math problems to verify transactions.
Now, validators just lock up their ETH as a deposit to verify them instead.
Used 99% less energy.
Helped steady the fees slightly.
EIP-4844 (the Dencun upgrade) introduced something called proto-danksharding.
Simple idea: It created a cheaper way for Layer 2 networks to send their data back to Ethereum.
This dropped Layer 2 costs by 90%.
So what are Layer 2s?
Networks like Arbitrum, Optimism, and Base that sit on top of Ethereum.
Instead of every single transaction being processed one by one on Ethereum directly, these networks bundle up hundreds of transactions together and settle them on Ethereum all at once.
Way faster.
Way cheaper.
Most of the activity that used to clog Ethereum moved there and the congestion disappeared.
Today gas sits at 0.049 gwei.
Average transaction costs under $0.50.
Minting an NFT costs about $0.40.
That's over 10,000x cheaper than the peak.
Here's the part nobody talks about:
Gas fees didn't drop because Ethereum got big enough to handle the demand.
They dropped because the demand disappeared.
DeFi slowed down.
NFTs collapsed.
Users moved to Solana, Base, and cheaper chains.
The block space people were fighting over is now sitting half empty.
Ethereum got cheaper the same way a highway clears up not because they added lanes, but because everyone took a different route.