Meme Coin Frenzy Drives Ethereum Network Fees to Nearly 2-Year High: IntoTheBlock

The
Ethereum
network’s
revenue
surged
to
nearly
two
year
highs
this
week
as
the
speculative
frenzy
with
meme
coins
boosted
blockchain
activity,
IntoTheBlock
noted
in
a
Friday
market
report.

IntoTheBlock
data
shows
that
Ethereum
mainnet’s
revenue
from
network
fees
reached
$193
million
this
week,
the
highest
figure
since
May
2022
and
a
78%
increase
from
last
week.

The
on-chain
activity
was
largely
driven
by
increased
speculation
with
meme
tokens,
IntoTheBlock
analysts
said.
Ethereum-based
meme
tokens
such
as
pepe

(PEPE),
shiba
inu

(SHIB)
and
floki

(FLOKI)
more
than
doubled
in
price
over
the
past
week
as
retail

Meanwhile,
trading
volumes
on
decentralized
exchanges
(DEX)
built
on
top
of
Ethereum
jumped
40%
to
$20
billion
this
week,

DefiLlama
data
shows.

Read
more:



SHIB’s
106%
Move
Higher
Led
CoinDesk
20
Gainers
Last
Week:
CoinDesk
Indices
Market
Update

The
frenzy
is
benefitting
investors
who
hold
ether

(ETH),
the
network’s
native
token,
because
of
its
token
burning
scheme.
After
Ethereum’s
transition
to
a
proof-of-stake
blockchain
–
commonly
referred
to
as
the
Merge
–,
the
network
destroys
a
part
of
the
transaction
fees
paid
by
users,
decreasing
the
token’s
supply.

Over
the
past
week,
ETH’s
supply
shrunk
by
some
33,400
tokens
(worth
roughly
$130
million
at
current
prices),
and
is
deflationary
at
a
1.45%
annualized
rate,
according
to

Ultrasound.money
data.

On
the
other
hand,
the
heightened
activity
has
made
the
blockchain
very
pricey
for
users.
Average
transaction
costs
(gas
fees)
on
Ethereum
rose
to
as
high
as
$28
this
week,
making
it
“unusable”
for
many
users,
IntoTheBlock
noted.

Fees
on
layer
2s,
designed
to
scale
the
Ethereum
network,
also
surged,
with
transactions
costing
as
much
as
$1
on
Arbitrum,
the
highest
since
2022,
the
report
said.
This
issue
has
a
quick
fix
though
with
the

Dencun
upgrade
coming
up
next
week,
which
is

expected
to
lower
transaction
costs
on
layer
2s
to
cents.

Ether
briefly
topped
$4,000
on
Friday
for
the
first
time
since
late
2021,
but

tumbled
over
4%
along
with
bitcoin

(BTC).
Recently,
ETH
changed
hands
at
around
$3,900,
up
15%
this
week,
in
line
with
the
broad-market
CoinDesk
20
Index’s
(CD20)
advance.