Since the beginning of March, meme coins have surged to unprecedented levels of value, increasing blockchain activity in the process. Ethereum gas fees have surged to two-year highs this week due to the recent craze.
Leading on-chain analytics service IntoTheBlock recently shared the news of this new achievement on social media site X. ITB data shows that this week’s $193 million in network fee revenue for the Ethereum mainnet pushed the yearly rate to its highest level since early 2022.
Ethereum’s $190M+ in weekly fees puts it at an annualized rate of over $10B for the first time since early 2022.
Due to Ethereum’s fee-burn mechanism, this also has an impact on the supply, decreasing it by 33k ETH (~$125M) this week. pic.twitter.com/iAibEvzh4j— IntoTheBlock (@intotheblock) March 8, 2024
Increases in Ethereum Gas Fees Owing To Meme Coin Activity
Due to current market conditions, cryptocurrency investors are swarming to Ethereum-based meme currencies such as Floki, Pepe, and Shiba Inu. PEPE has led the recent meme coin surge with a return of almost 600% in February, according to ITB data, making it the cryptocurrency with the best performance.
PEPE’s gain has been carried over into the current month, resulting in an 800% increase in the cryptocurrency in just 30 days. Floki has increased by 800% within the same period.
Shiba Inu has increased by 275% over the last 30 days, peaking on March 5 at $0.00004456. The price of Shiba Inus surged due mostly to a 2,000% increase in new addresses compared to the February average, which peaked on March 5 at 21,000 new addresses.
Shiba Inu is now trailing Dogecoin by less than $4 billion in market capitalization and is poised to overtake Dogecoin as the largest meme coin.
Many Ether traders have profited from the increased activity on meme coins, which have attracted more traders to Ethereum decentralized exchanges (DEXs). According to data from DeFiLlama, trading volumes on DEXs have increased by 40% this week to $20.74 billion.
Alongside this, the cost of gas has also increased. ITB reports that this week’s average gas fees on the blockchain increased to $28. It’s interesting to note that on March 5, the daily total spent on gas costs hit $38.02 million, the largest amount since May 2023.
Meme Coin Activity Will Continue To Benefit
Currently, the Ethereum network is spending $10 billion in gas fees annually. Prior to the mid-2022 meltdown of the cryptocurrency market, gas prices were last this high.
For the first time in the previous two years, Ethereum was able to reach a new price milestone above $4,000 thanks to the increased activity.
Ethereum’s total supply has decreased during the last week as a result of Ether’s fee-burning plan, which has removed 33,000 ETH worth more than $125 million from circulation. Now that Bitcoin is clearly leading the way, Ethereum can easily follow suit and set a new record in the upcoming weeks.
