Recent Ethereum gas fee fluctuations have significantly impacted DeFi user activity. High fees, driven by network congestion, increase transaction costs, deterring users from engaging with DeFi protocols. On-chain data shows that during peak fee periods, transaction volumes on platforms like Uniswap and Aave drop as users avoid costly swaps or lending. Conversely, post-Dencun, fees crashed 95% (72 to 2.7 gwei), boosting Layer-2 activity and reducing costs, yet overall DeFi engagement hasn’t fully recovered. High fees stifle participation, while lower fees enhance scalability but don’t guarantee sustained user growth without broader ecosystem momentum.