Ethereum Network's Gas Fees Skyrocket Amid Memecoin Frenzy
Rebeca Moen Apr 22, 2023 08:27
Ethereum's gas fees have hit a new multi-month high due to the growing memecoin frenzy. While this has brought in more revenue for the network, it has also caused congestion and difficulty in processing transactions.
The Ethereum network has been experiencing a surge in gas fees due to the ongoing memecoin frenzy. As a result, the network's daily revenue has skyrocketed and has even surpassed that of Bitcoin. However, while some Ethereum proponents celebrate the growing revenue, many others are concerned about the network's growing congestion and the difficulty in processing transactions.
According to recent reports, there has been an unusual shift in the top 10 gas-burning altcoins. Instead of the usual suspects like ETH, WETH, and USDT, memecoins such as TROLL, APED, and BOBO have become the top 10 spenders. The average gas price for Ethereum transactions as of April 20 was 81.94 gwei, which is a significant increase from 60.82 gwei on April 19 and 44.42 gwei last year.
Independent Ethereum educator Anthony Sassano noted the surge in daily fee revenue of the Ethereum network and pointed out that the network had brought in 28 times the revenue of Bitcoin. He also mentioned Ethereum layer-2 platforms like Arbitrum One that have outperformed the BTC network in terms of daily revenue due to the ongoing meme frenzy.
Ethereum proponents argue that the high gas fee and subsequent higher revenue highlight the network's growing usability. However, many on Crypto Twitter were quick to point out that the extensive usage they are referring to is just a few thousand users gambling on memecoins. Some users have even paid gas fees as high as a few hundred dollars, while others complained about having to pay a higher gas fee than the actual transaction.
The soaring gas fees were also blamed on a Maximal Extractable Value (MEV) trading bot that is front-running memecoin trades on a massive scale. The bot in question, jaredfromsubway.eth, has been the top gas spender in the last 24 hours, spending 455 ETH ($950,000) and using 7% of the total gas of the network. In the last two months, it has spent more than 3,720 ETH ($7 million) in gas fees and performed more than 180,000 transactions. The Subway-themed bot is using the sandwich trading technique to pocket millions of dollars while congesting the network at the same time.
This situation highlights the need for Ethereum to address its scalability issues and find a long-term solution to address the increasing demand for memecoin trading. The current frenzy may be beneficial for short-term revenue, but it is also causing significant congestion and higher fees for users. The Ethereum network needs to find a balance between profitability and usability to ensure the long-term sustainability of the network.
In conclusion, the growing memecoin frenzy has caused Ethereum's gas fees to skyrocket and has resulted in a surge of revenue for the network. However, it has also highlighted the growing congestion and difficulty in processing transactions. The Ethereum network needs to find a long-term solution to address its scalability issues and find a balance between profitability and usability to ensure its long-term sustainability.
Image source: Shutterstock