Ethereum Gas Fees Drop After Memecoin Craze Winds Down

  • Transaction fees on Ethereum dropped 69% from April as the meme coin frenzy slowed down.
  • Experts say the reduced gas fees could be a positive boost for the overall network strength, increasing actual network utility. 
  • A cross-section of users bemoans the use of meme coins to clog networks which results in high gas fees to the detriment of the community. 

The Ethereum (ETH) and Bitcoin (BTC) networks suffered several congestion levels in May occasioned by meme coins and BTC Ordinals, respectively.

Gas fees on Ethereum have plummeted sharply by 69% over the last 30 days as a result of declining meme coin trading volumes. Transaction fees reached a 12-month high, hitting 140 gwei per activity. One gwei is equal to one billionth of one ETH. 

PEPE was central to the surge as gas fees spiked by 50% since the launch of the token. Other meme coins like Aped (APED) and Bobo Coin (BOBO) also added to the surge and became more significant when they dominated the top 10 gas-burning altcoins. According to Santiment, PEPE, APED, etc. joined the usual dominant altcoins ETH, Wrapped Ethereum (WETH), and USDT. 

Presently, the median gas fees cost about $7, which is approximately 24 gwei according to Dune analytics. The sharp decline in gas fees follows the fall of PEPE, which is down 70% from its all-time high within 30 days. PEPE has also fallen 14% in the past 24 hours since the Securities and Exchange Commission (SEC) filed a lawsuit against Binance for listing unregistered securities.

Experts have expressed optimism following the in transaction fees, adding that affordable fees lead to a stronger utility around a network. A cross-section of users is opposed to meme coins on their preferred network calling it “anti utility” and an easy way to lose one’s value. 

BTC Ordinals put Bitcoin down the same path

With Bitcoin also receiving its fair share, May was the month of increased gas fees across networks. Last month, BTC Ordinals hit 10 million inscriptions, spiking transaction volumes on the network to new highs.

As a result, network fees surged up to $20 per transaction leading to mass complaints and a temporary halt of withdrawals by leading crypto exchange, Binance. At the time of Binance’s announcement, there were more than 420,000 transactions in the mempool. 

Ordinals recorded about 2.5 million inscriptions across the week, during which the network suffered congestion, with some users calling it an “attack” on the network.

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