The transaction fees on the Ethereum (ETH) network, known as gas fees, were one of the biggest criticisms of the network during the previous bull market. During periods of high activity, these fees could skyrocket, causing users to think twice about whether executing the transaction would even be profitable. Future updates are expected to improve the scalability of the layer-1 blockchain, preventing such exorbitant transaction fees.
Amid the current hype surrounding some meme-coins, gas fees have once again skyrocketed and are currently at their highest point in months.
Meme-coins contribute to high ETH fees
The high transaction costs have multiplied Ethereum’s daily revenue compared to Bitcoin (BTC). While some advocates of the Proof-of-Stake (PoS) blockchain celebrated the revenue growth, many others quickly pointed out the growing congestion on the network and the difficulty in processing transactions.
Data from Santiment shows an unusual shift in the top ten “gas-burning” altcoins. Normally, ETH, wrapped ether (WETH), and Tether (USDT) are among the largest contributors, but now it’s mainly meme-coins. New assets like Trollcoin (TROLL), APED (APED), and BOBO (BOBO) currently make a significant contribution to the high transaction costs on the network.
The average gas price for transactions on the Ethereum network was 81.94 gwei on April 20, an increase from 60.82 gwei on April 19 and 44.42 gwei last year – an increase of 34.74% compared to April 19 and 84.46% compared to April 20, 2022.
It’s crucial to keep an eye on the trends in the crypto market and understand the potential impact on transaction fees. While meme-coins can be exciting, they can also lead to unforeseen consequences. Ethereum’s future updates may improve scalability and alleviate the issue of high transaction fees, but for now, users must consider the potential costs before making any transactions.
Disclaimer: This blog post is for informational purposes only and should not be construed as financial advice. There may be errors or omissions in this post, and readers should do their research before making any investment decisions.