Blockchain
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). 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), WETH, and USDT (USDT), memecoins such as TROLL, APEDand BOBO were among the top 10 spenders.
⛽️ A highly unusual shift in top 10 gas burning #altcoins has emerged today. Instead of $ETH, $WETH, and $USDT being at the top of the fee distribution list, we’re seeing new assets like $TROLL, $APED, and $BOBO among them. Read our latest deep dive. https://t.co/7SlmJ59k2m pic.twitter.com/Y2kaLKZTrL
— Santiment (@santimentfeed) April 19, 2023
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
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.
The extensive usage you’re talking about are a few thousand users gambling meme coins. I thought (and hoped) eth was supposed to be the future of finance
— nap.BasicallyRiskFree (@CryptoPannella) April 20, 2023
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.
try to buy a ~$20 NFT on eth, and the gas is ~$40.
some ppl say the infra operators deserve to be paid. sure, but imaging paying visa $40 fee for buying a $20 digital good.. infra should be affordable. pic.twitter.com/5L4SYjT5af— 0xMQQ (@0xMQQ) April 18, 2023
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.
bro has used 7% of the total gas on ethereum over the past 24hrs (455 ETH) just feasting away on $pepe
data from the legendary @hildobby_ https://t.co/j3SqtQnkKJ pic.twitter.com/hWavtdO1D5
— beetle (@1kbeetlejuice) April 18, 2023
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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