PEPE, a meme coin that has captured the attention of many investors due to its wild price surges, is causing Ethereum gas fees to surge as well. As of May 4th, the average gas fee for a single transaction on the Ethereum network had reached a one-year high of $15.8. Although it is not as high as the fees observed during the bull run of 2021, which ranged from $50 to $70, the fees are still quite expensive when compared to the lows observed during the 2022 Terra LUNA market crash.
PEPE’s market capitalization currently sits around $863 million, with the coin recently breaking into the top 100 cryptocurrencies and achieving a $500 million market cap in just a few days. Trading volume has also surged, with PEPE becoming the largest coin on the Uniswap decentralized exchange, surpassing WBTC and USDT, with a trading volume of over $150 million in the past 24 hours.
Increased Popularity of Other Meme Coins According to data from crypto analytics firm Nansen, investors who missed out on the rise of PEPE are now putting their money into other meme coins, such as SPONGE, TURBO, BOB, and TRBNR. These coins are currently the most active smart contracts on the Ethereum network’s Uniswap exchange.
Impact on Ethereum Gas Fees The rise of meme coins, including PEPE, has caused a surge in demand for transactions on the Ethereum network, leading to a significant increase in gas fees. Ethereum gas fees are the costs incurred when executing a transaction or a smart contract on the Ethereum network. The more congested the network is, the higher the gas fees become.
As meme coins continue to attract investors, the Ethereum network’s congestion is expected to persist, leading to even higher gas fees. Ethereum’s developers are aware of the issue and are working to address it with the upcoming Ethereum 2.0 update, which is expected to improve the network’s scalability and reduce gas fees.
Conclusion The popularity of meme coins, such as PEPE, is driving up Ethereum gas fees due to the increased demand for transactions on the network. Investors who missed out on the rise of PEPE are also flocking to other meme coins, which is further exacerbating the congestion on the Ethereum network. As Ethereum’s developers work on improving the network’s scalability, investors and traders will need to be aware of the impact that meme coins have on gas fees when executing transactions on the Ethereum network.
