The average transaction fee on Ethereum has reached its highest level since May 2022, following positive signals on the network. Specifically, transaction fees on the Ethereum network have increased to around 87 gwei on May 2nd, according to data from Dune Analytics. Hildobby, a researcher at VC firm Dragonfly, explained in a tweet on May 4th that the reason for the high Ethereum gas fees is due to the memecoin frenzy.
The hype around memecoins has started to heat up recently, with the leading hot streak being PEPE. This memecoin takes its inspiration from the famous meme image of the green frog Pepe. Within just three days, the price of PEPE skyrocketed by 21,000%, quickly entering the top 100 largest cryptocurrencies in terms of market capitalization at $451.5 million on May 1st.
However, the market capitalization of the PEPE memecoin dropped from $582 million to $397 million on May 3rd. According to Xin Yi, a researcher at Nansen, the sudden drop in PEPE’s market cap after a whale movement reflected the limited liquidity of this token.
Meanwhile, the market capitalization of memecoins surged to over $500 million this week before dropping below $400 million. Many of these coins are lacking in liquidity, making them susceptible to sharp price fluctuations.
Most memecoins are traded on centralized exchanges, which has driven activity on the Ethereum network higher. Decentralized exchanges (DEXs) on Ethereum have seen the highest number of users since 2021 due to the demand for memecoin trading. According to data from The Block Pro, Ethereum DEXs saw over 72,000 daily active traders in April.
In addition, the number of users of EVM-compatible blockchains also hit an all-time high last week. According to data from The Block, the daily active addresses of some EVM-compatible blockchain projects reached 6.77 million on April 25th.
This includes prominent names like BNB Chain, Polygon, and Avalanche. However, these blockchains have lower transaction fees compared to Ethereum.
Read more:
- PEPE Rockets To Cryptocurrency Fame: Soars 90% In 24 Hours And Gains 638% In One Week
- PEPE Memecoin Skyrockets 2100% Since Launch, Uniswap Liquidity Pool Buzzing With Activity