Summary:
- Etherscan data showed the average cost of Ethereum transactions rose as high as $15 on May 4, a 1-year high.
- Gas fees on L2 networks also skyrocketed, particularly on chains built using zero-knowledge proofs like Polygon zkEVM and zkSync Era.
- Crypto participants believe the memecoin renaissance led by PEPE coin is the main reason behind expensive transaction costs on crypto’s largest altcoin blockchain.
Gas fees on Ethereum flew to their highest level since 2022 in the middle of a memecoin renaissance championed by the “Pepe the frog” themed altcoin, PEPE.
The cost of sending transactions rose as high as $15 on May 4, its highest point in over a year. Gas fees had previously stayed at lower levels in the months after Terra crashed and the crypto markets nosedived.
PEPE Trading Propels Ethereum Gas Fees
Ethereum’s ecosystem is no stranger to memecoin mania as tokens like Dogecoin and Shiba Inu have drawn speculative traders before. It’s unclear whether the PEPE token will last as long as these OG memecoins after hitting a $1 billion market cap, a topic that Binance weighed in on after listing PEPE for spot trading today.
Binance paused PEPE deposits shortly after citing technical difficulties.
There are also indicators pointing to PEPE as the reason behind Ethereum’s pricey gas fees. PEPE holders traded $150 million in volume over the past 24 hours on the decentralized exchange Uniswap.
Increased interest in PEPE pushed the token into the top 100 cryptocurrencies by market cap. The token sits at #42 according to CoinMarketCap. Nansen data clocked several copycat tokens and increased trading activity tied to other memecoins on ETH’s chain.
High Gas Fees Rock L2 Networks Too
Layer 2 networks designed to reduce transaction costs experienced high gas fees as network demand shot up. Fees on layer 2 scaling solutions built using zero-knowledge proofs like Polygon zkEVM and zkSync Era were significantly higher than L2’s designed using optimistic rollups.
Per L2 Fees data, the cost of a single transaction on zk rollups ranged between $2 to $11, rising as high as $30.
Users also flocked to Ethereum Virtual Machine-compatible chains like BNB Chain as memecoin mania continued.