The average gas fee – transaction fee – on the Ethereum network has dropped substantially in the first week of June after hitting a multi-month high in May, due to the memecoin frenzy and lots of MEV bot activity.
The average price of gas has fallen to 7.34 gwei, which is a drop of almost a third from the peak of 20 gwei reached last month. In terms of gwei – a denomination of Ether (ETH) representing a billionth of 1 ETH-, the average daily gas price has fallen to 24 gwei from a high of nearly 140 gwei last month, according to Dune Analytics.
The memecoin frenzy started at the end of April and became more prominent in May, bringing multiple new memecoins to the markets, such as Aped (APED), Bobo Coin (BOBO) and others. The dominance of memecoins in network activity was so high that it created an unusual turnaround in the top 10 gas-burning altcoins. Instead of ETH, Wrapped Ether (WETH) or Tether (USDT), memecoins like Troll (TROLL), APED and BOBO became the top 10 gas burners.
â›½ï¸ A highly unusual shift in top 10 gas burning #altcoins you have emerged today. Instead of $ETH, $WETHand $USDT being at the top of the fee distribution list, we’re seeing new assets like $TROLL, $APEDand $BOBO among them. Read our latest deep dive. pic.twitter.com/Y2kaLKZTrL
—Santiment (@santimentfeed) April 19, 2023
Another prominent reason for the rise in Ethereum gas fees was the growing popularity of memecoins on decentralized platforms, as major centralized exchanges take longer to include them in their token offerings.
The month of May was not only marked by the Ethereum memecoin frenzy, but Bitcoin Ordinals also became extremely popular. Ordinals enable decentralized storage of digital art on the Bitcoin blockchain. As a result, the Bitcoin network registered many new memecoins, and Pepecoin (PEPE) reached a market capitalization of one billion dollars.
The Ordinals were introduced in January, and by the end of May, the number of Ordinals signups on the Bitcoin network had exceeded 10 million. Total commissions paid for Ordinal signups increased by 700% in May and currently stands at 1,639 Bitcoin (BTC).
With the memecoin frenzy subsiding, Ethereum fees have cooled, and Ordinals signups have also dropped significantly.
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