Ethereum’s weekly revenue from transaction fees has climbed to its highest since May 2022

The main reason was the increased user activity associated with meme tokens

11.03.2024 - 08:23

3 min

What’s new? The revenue from transaction fees on the Ethereum network’s mainnet reached $193 million last week, up 78% from the previous week and reaching its highest level since May 2022. According to IntoTheBlock analysts, the reason was increased network activity related to meme tokens.

IntoTheBlock’s report

What else is known? The largest Ethereum-based meme tokens by capitalization, such as PEPE, SHIB, and FLOKI, more than doubled in value over the past week. In addition, trading volumes on decentralized exchanges (DEXs) on the Ethereum network grew by 40% and exceeded $20 billion over the same period. In turn, centralized exchanges (CEXs) received $300 million worth of ETH, breaking an 8-week streak of asset outflows.

Santiment points to the redistribution of profits from BTC in favor of meme tokens

PEPE, FLOKI, and WIF became the leaders in terms of profitability growth

Due to the mechanism of burning a portion of tokens paid as transaction fees, which was implemented along with the blockchain’s transition to the Proof of Stake consensus algorithm, the supply of ETH decreased by 34 720 coins worth $130 million over the past week. The asset’s annual inflation rate, according to Ultrasoundmoney, is 1,51%.

On the other hand, the increased activity has made blockchain very expensive for users. Average transaction costs have risen to $28, making Ethereum “unusable” for many users, analysts at IntoTheBlock write.

The fees also increased in the Layer 2 (L2) networks designed for Ethereum scaling. Thus, fees in the Arbitrum network reached $1, which was the highest since 2022. However, as analysts noted, the problem will be fixed with the release of an Ethereum upgrade called Dencun, which will reduce fees in L2 networks to a few cents. The upgrade is expected to take place on March 13.