Ethereum gas fees soared in the past few days due to the frenzy surrounding meme-inspired cryptocurrencies. The popularity of these coins has led to the growing demand for transactions on the Ethereum network, resulting in higher fees.
Memecoins made a remarkable comeback, with Pepe The Frog leading the way. Recently deployed memecoins, including $TROLL, $APED, and $BOBO, took over top gas-burning altcoins, per market analysis platform Sentiment.
Memecoins go Crazy
Data indicates that Ethereum’s average gas price for transactions on April 20 has spiked to 81.94 gwei (gwei serves as a unit of measurement for Ether – 1 gwei equals 10-9 ETH). It marks a significant increase from 60.82 gwei on April 19 and 44.42 gwei during the same period last year.
Ethereum educator Anthony Sassano highlighted the staggering surge in daily fee revenue on the Ethereum network in his recent post. According to Sassano, the remarkable success of Ethereum’s layer-2 platforms, notably Arbitrum, outperformed the BTC network.
The revenue surge has been attributed mainly to the ongoing meme frenzy gripping cryptocurrency markets. The observations also highlighted the growing dominance of Ethereum in the ever-evolving crypto landscape.
Despite the high fees, users persist in utilizing these networks. This suggests that these networks’ benefits and opportunities outweigh the financial costs.
A Small Market
While some analysts view this as an indicator of its growing usability, critics have raised concerns, pointing out that the extensive usage being touted is primarily limited to a few thousand users gambling on memecoins.
Another factor is the increased activity of a Maximal Extractable Value (MEV) trading bot known as “jaredfromsubway.eth”. This bot has been front-running memecoin trades significantly, spending a remarkable 455 ETH (equivalent to $885,000) and utilizing 7% of the total gas on the network in the past 24 hours.
Ethereum gas fees have been the topic of discussion within the Ethereum community. High gas fees can make using the network expensive for certain activities, such as small transactions or interacting with low-value smart contracts.
Ongoing efforts are to improve Ethereum’s scalability and reduce gas fees, including Layer-2 scaling solutions and other optimization techniques to make the network more efficient and cost-effective for users.
Zk-Rollups Making Waves
Buterin highlighted during the ETHSeoul event last year that the fundamental advantages of Zero-knowledge Rollup technology are expected to position them as the superior choice for Ethereum layer 2 scaling solutions.
Layer 2 scaling solutions for Ethereum have been experiencing impressive growth recently. These solutions are essential for increasing transaction processing capacity, reducing network congestion, and improving the user experience on Ethereum.
Bundling multiple transactions into one transaction through layer 2 solutions can significantly reduce gas fees, making it more accessible for users to interact with the network.
The combined growth of Zk-rollups and the maturity of Ethereum has the potential to create a robust future.
However, after successfully completing the Shanghai upgrade, Ethereum now faces an uncertain short-term future as ETH stakers seek alternative avenues to deploy their recently withdrawn holdings, which raises concerns about the potential detrimental impact on the price of ETH.
Nevertheless, Ethereum remains the top secure and decentralized ecosystem in the blockchain space, with over 3500 different decentralized applications (DApps) and a vibrant and creative developer community, making it a favored choice for developing high-quality projects.
Ethereum has also outlined several upcoming upgrades and improvements in its roadmap, with the next major hard fork being sharding.
Sharding aims to increase the network’s throughput directly without relying on layer 2 solutions and is expected to be a significant milestone in the evolution of Ethereum. It will enable the network to handle much larger transactions than it currently can, further enhancing its scalability and potential for future growth.
The future for Ethereum looks great – memecoins, on the other hand, are a very murky market.