Discover How Meme Coins Are Skyrocketing Ethereum Fees To Record-Breaking Highs: Insights By IntoTheBlock

The Ethereum network’s revenue reached a nearly two-year high this week, driven by a speculative surge in meme coins and resulting in a significant boost in blockchain activity, as reported by IntoTheBlock in their Friday market report.

According to data from IntoTheBlock, revenue from network fees on the Ethereum mainnet hit $193 million this week – a massive 78% increase over last week and the highest figure seen since May 2022. Ethereum network’s daily revenue from fees hit its highest since May 2022. (IntoTheBlock)

The driving force behind this increased on-chain activity is largely attributed to a rise in speculation with meme tokens, according to analysts at IntoTheBlock. In particular, meme tokens based on the Ethereum network such as pepe (PEPE), shiba inu (SHIB), and floki (FLOKI) saw their prices more than double over the past week, largely driven by retail investors.

In addition to this surge in activity, trading volumes on decentralized exchanges (DEXs) built on top of Ethereum also saw a significant increase of 40%, reaching a total of $20 billion this week according to data from DeFiLlama.

While this frenzy in the market may benefit investors holding ether (ETH) – the network’s native token – due to the token burning scheme that is activated during Ethereum’s transition to a proof-of-stake blockchain (referred to as the Merge), it has also made the blockchain significantly expensive for users. Average transaction costs, or gas fees, on Ethereum rose to an average of $28 this week, making it increasingly unaffordable for many users, as noted by IntoTheBlock.

Even fees on layer 2 scaling solutions have seen a surge, with transactions on platforms such as Arbitrum costing as much as $1 – the highest seen since early 2022. However, a solution to this issue is expected to come next week with the Dencun upgrade, which is expected to significantly lower transaction costs on layer 2 solutions to just cents.

Despite these challenges, ether managed to briefly surpass the $4,000 mark on Friday for the first time since late 2021. However, it saw a 4% decline in the following hours, along with bitcoin (BTC). Currently, ETH is trading at around $3,900 – a 15% increase from last week, in line with the overall advance seen in the CoinDesk 20 Index (CD20).