ETH-based transactions just went through the roof again. Are meme frenzy and FOMO to blame?
Ethereum transactions just got costly.
On April 20, the average gas price for Ethereum transactions was 81.94 gwei, a denomination of Ether that is one billionth of one ETH. This represents an increase of 34.74% from April 19 and 84.46% from April 20, 2022.
On April 21, the number went down to 76.59 gwei. As a result, some users were forced to pay fees that amounted to several hundred dollars. In certain cases, the fees were higher than the actual transaction.
Source: Ycharts
The reasons for this spike are not entirely clear. However, Santiment, a market intelligence platform with on-chain & social metrics for 2,500+ cryptocurrencies, suggests it could be FOMO.
“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,” they write. “These indicators strongly suggest that FOMO, or the Fear of Missing Out, is reaching its peak among market participants.”
TROLL, APED and BOBO are all meme coins.
Source: Twitter
Yet, it’s not just FOMO which is suspected to play a role in this sudden spike. Maximal Extractable Value (MEV), a trading bot that is front-running memecoin trades on a massive scale, also likely played a role. The bot jaredfromsubway.eth is one of the top gas spenders in the last 24 hours, spending 455 ETH ($950,000) and using 7% of the total gas of the network.
During the course of two months, it spent more than 3,720 ETH ($7 million) in gas fees and carried out over 180,000 transactions.
Previously, GNCrypto reported that Vitalik unveiled Ethereum verification solutions.
