The Rise of Ethereum (ETH) Gas Fees Due to Meme Coins
Ethereum (ETH) network transaction fees, also known as gas fees, were one of the biggest criticisms of the network during the previous bull market. These fees could become enormous during periods of high activity, causing users to reconsider whether executing a transaction was even profitable. Future updates should improve the scalability of the layer-1 blockchain, which should prevent these sky-high transaction fees.
Currently, amidst the hype surrounding some meme coins, gas fees are once again on the rise, even to the highest point in months.
Meme Coins Contributing to High ETH Fees
The high transaction fees have multiplied Ethereum’s daily revenue compared to Bitcoin (BTC). While some proponents of the Proof-of-Stake (PoS) blockchain celebrated the revenue growth, many others quickly pointed to the growing congestion on the network and the difficulty of processing transactions.
Santiment’s data shows that an unusual shift has occurred in the top ten gas-burning altcoins. Normally, ETH, wrapped ether (WETH), and Tether (USDT) are the biggest contributors, but now it is primarily meme coins. New assets such as Trollcoin (TROLL), APED (APED), and BOBO (BOBO) are currently making a significant contribution to the high network transaction fees.
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Data Analysis of Gas-Burning Altcoins
A few years ago, while the hype around cryptocurrencies was at its peak, the gas fees for transactions increased exponentially. Many people were interested in joining the blockchain revolution, and developers started creating their own cryptocurrencies. One of the consequences of this was the increased demand for the Ethereum (ETH) network.
Back then, there were already signs that Ethereum’s network would not be capable of handling the influx of users. During peak hours, transaction speeds slowed down considerably, and the network became congested. Moreover, high transaction fees made it increasingly difficult for regular users to transact on the blockchain.
The situation with gas fees, however, has changed recently. Instead of the usual suspects being the top gas burners, we now see meme-coins such as TROLL, APED, and BOBO among them, as shown in the data analysis of gas-burning altcoins. This shift in the ranking of the top gas-burning altcoins can have adverse effects on Ethereum’s network.
Gas Fees and Network Congestion
As more investors become interested in the decentralized platform, Ethereum’s network has become crowded, leading to high transaction fees. While some experts consider the high fees a sign of the platform’s growing usability, others view it as undesirable. According to the experts, when the number of active users on the network is high, the fees also increase in tandem.
Ethereum’s recent spike in gas fees is due to many factors, such as the popularity and the type of applications making use of the platform. However, the primary cause of Ethereum’s high gas fees is usually from the high network congestion.
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Discussion Within the Ethereum Community
The main argument for Ethereum supporters is that high transaction costs and the consequent higher revenue highlight the platform’s growing usability. However, many in the crypto community on Twitter are referring to the fact that the growing usability currently refers to just a few thousand users who gamble on meme coins.
Several Twitter users have also reported paying hundreds of dollars in gas fees, while others complained that the transaction fees were higher than the original transaction itself. The community is divided on the issue of gas fees, and some are calling for an immediate fix to the problem.
Ethereum’s gas fees have been a source of criticism of the platform for many years. While some experts argue that the high fees indicate the platform’s growth, others consider it a significant drawback. With the rise of meme cryptocurrencies, gas fees have been a cause for concern, making transactions unprofitable for users. Developers are working to improve the scalability of the platform, which should hopefully lead to reduced gas fees in the future, making it more accessible to users.