2024-06-21
Ethereum Global News

Ethereum gas fee jumped due to memecoin frenzy with mixed comments on network usability

Ethereum proponents celebrated the growth in daily revenue, while many others pointed toward network congestion and difficulty in usage.

Ethereum network’s gas fee skyrocketed to a new multi-month high amid a growing memecoin frenzy. The high transaction fee has swelled Ethereum’s daily revenue multifold compared to Bitcoin BTC $28,012. While Ethereum proponents celebrated the growth in revenue, many others were quick to point out the growing congestion on the network and the difficulty in processing transactions.

There was an unusual shift in the top 10 gas-burning altcoins where instead of ETH ETH $1,919, WETH, and USDT  USDT $1.00, memecoins such as TROLL, APEDand BOBO were among the top 10 spenders.

The average gas price for Ethereum transactions as of April 20 was 81.94 gwei, up from 60.82 gwei on April 19 and 44.42 gwei last year — an increase of 34.74% from April 19 and 84.46% from April 20, 2022. Gwei is a denomination of the Ether and represents one billionth of one ETH.

ETH gas fee increase in last month. Source: Ychart

Independent Ethereum educator Anthony Sassano shared the surge in daily fee revenue of the Ethereum network and said that the second-largest blockchain had brought in 28 times the revenue of Bitcoin. He also cited Ethereum layer-2 platforms like Arbitrum One that have outperformed the BTC network in terms of daily revenue due to the ongoing meme frenzy.

Daily and weekly revenue of various blockchain. Source: Twitter

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Ethereum proponent’s main argument is that the high gas fee and subsequent higher revenue highlight the network’s growing usability. However, many on Crypto Twitter were quick to point out that the extensive usage they are referring to is just a few thousand users gambling on memecoins.

A few users reportedly paid gas fees as high as a few hundred dollars, while others complained about having to pay a higher gas fee than the actual transaction.

Another prominent reason for the soaring gas fees was blamed on a Maximal Extractable Value (MEV) trading bot that is front-running memecoin trades on a massive scale. The bot in question jaredfromsubway.eth has been the top gas spender in the last 24 hours, spending 455 ETH ($950,000) and using 7% of the total gas of the network.

Related: Tether blacklists validator address that drained MEV bots for $25M

In the last two months, it spent more than 3,720 ETH ($7 million) in gas fees and performed more than 180,000 transactions.

The Subway-themed bot is using the sandwich trading technique to pocket millions of dollars while congesting the network at the same time.

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Source : Cointelegraph.com