Imagine paying $80 in fees just to send $50 worth of crypto to a friend. In 2021–2022, that was a normal Tuesday on Ethereum. Today, most people pay less than $1 for the same transaction — and it’s usually settled in seconds instead of minutes. This dramatic change didn’t happen by magic. It happened because of a series of major upgrades that completely transformed how Ethereum works.
Welcome to the new era of Ethereum.
Why Ethereum Needed an Upgrade in the First Place
Ethereum launched in 2015 as the first blockchain that could run smart contracts and decentralized apps (dApps). It quickly became the home of DeFi, NFTs, and thousands of projects. But success brought problems:
- The network could only handle about 15–30 transactions per second.
- When demand spiked, gas fees exploded.
- The original Proof-of-Work system consumed as much electricity as a medium-sized country.
Users were frustrated, developers were leaving for cheaper chains, and Vitalik Buterin himself said the network was hitting its limits. Something big had to change.
The Big Switch: From Proof-of-Work to Proof-of-Stake (The Merge)
The most famous upgrade happened on September 15, 2022, and it’s simply called “The Merge.”
In one historic moment, Ethereum stopped using energy-hungry miners and switched to validators who stake ETH to secure the network.
Key results (documented by the Ethereum Foundation and Ultrasound.money):
- 99.95% reduction in energy consumption
- Ethereum became deflationary for the first time (more ETH is burned than issued most weeks)
- Staking now secures the network with over 34 million ETH locked (~$90 billion at time of writing)
Fixing the Real Problem: High Fees (Dencun Upgrade – March 2024)
The Merge fixed energy and issuance, but fees were still painful during busy periods. The game-changer arrived in March 2024 with the “Dencun” upgrade (Cancun + Deneb).
The star feature: EIP-4844, also known as “proto-danksharding” or simply “blobs.”
Instead of storing all transaction data forever on the expensive main chain, Layer-2 rollups (Optimism, Arbitrum, Base, zkSync, etc.) can now attach cheap “blobs” of data that are available for a few weeks and then automatically deleted.
Result? Average Layer-2 transaction fees dropped from $1–$5 to $0.01–$0.10 almost overnight.
Real-world fee comparison (data from L2Fees.info – November 2025):
| Action | Cost on Ethereum Mainnet | Cost on Layer-2 (after Dencun) |
|---|---|---|
| ETH transfer | $2–$15 | $0.01–$0.10 |
| Uniswap swap | $10–$80 | $0.10–$0.80 |
| Bridge to Layer-2 | $5–$30 | $0.05–$1.00 |
What’s Happening Now and Next (2025–2026 Roadmap)
Ethereum’s upgrades continue every 12–18 months. The next major one is called “Prague/Electra” or simply “Pectra” (expected Q1–Q2 2026). Major improvements coming:
- EIP-7702: Lets normal wallets temporarily act like smart-contract wallets (huge UX win)
- More blob space (up to 18 blobs per block vs 6 today → even cheaper L2 fees)
- Verkle trees: Makes running a node much lighter
- Staking changes: Easier to stake with less than 32 ETH
Longer term (2027+), “The Surge” will push Ethereum to 100,000+ transactions per second using full danksharding.
So What Does This Mean for Regular Users?
- You can now use DeFi, play blockchain games, and collect NFTs, and send money globally for pennies.
- Most people never touch the expensive Ethereum mainnet anymore — they live on Layer-2 networks like Base, Arbitrum, or Optimism that feel exactly like the “old” Ethereum but are 50–100× cheaper.
- ETH has become a deflationary asset in many market conditions (check ultrasound.money for live burn data).
- The network is far more environmentally friendly and institution-friendly.
Final Thought
Ethereum didn’t just survive the “high fee” crisis — it evolved into something dramatically better while keeping the same core principles of decentralization and security.
Whether you’re a casual user sending stablecoins to family, a DeFi degen farming points, or just holding ETH for the long term, the upgrades of 2022–2025 have made the experience cheaper, faster, and greener than ever before.
The next time someone says “Ethereum fees are too high,” you can confidently reply: “That was the old Ethereum. Welcome to the new one.”
