Speculative trading in the memecoin market is one of the main driving forces behind the increase in Ethereum network fees.
The Ethereum ecosystem has experienced active developments in the second quarter of 2023. From the Shapella upgrade in April to the memecoin frenzy in May, there have been numerous rumors surrounding the most prominent blockchain smart contracts.
The increase in network fees that Ethereum has encountered is indeed related to the surge of memecoins based on Ethereum in the second quarter of 2023. Over the past few months, new memecoins such as APED, BOBO, PEPE, etc., have dominated the market, and most of these tokens have generated enormous profits.
The impact of memecoins on Ethereum’s network activity is significant to the extent that it has caused a shift in the leading gas-burning altcoins at some point in April 2023.
According to an analysis by Santiment, Meme tokens such as TROLL, APED, and BOBO are among the top 10 gas-burning altcoins.
Bitcoin has also experienced an increase in network fees during this time, with over 300% – the highest level since Q2 2021, due to token creation through the BRC-20 standard.
While Ethereum network fees increased in May, the supply of Ether has decreased to its all-time low. According to analysis by IntoTheBlock, Ether’s annual net issuance rate has dropped to a record low of 3.75% during the memecoin frenzy.
According to Coinmarketcap data, ETH is trading at $1,960, an increase of 2.45% in the past 24 hours. This token is the second-largest cryptocurrency in the world, with a market capitalization of approximately $233 billion.