Blockchain Transaction Fee and Ethereum Merge

We study the determinants of transaction fees in Bitcoin and Ethereum blockchains, particularly focusing on the recent Merge – Ethereum's shift from a Proof of Work to a Proof of Stake consensus method. Through multivariate regression analysis, we find that blockchain fees in USD increase with network congestion, measured by mempool count, in a non-linear fashion as hypothesized by Huberman, Leshno, and Moallemi (2021). The fees are also positively influenced by the native currency's returns over the past six months. The Merge resulted in a fee reduction for both Bitcoin and Ethereum blockchains