The average transaction fee or gas fee on the Ethereum network has cooled substantially in the first week of June after reaching a multi-month high in May, owing to the meme coin frenzy and many MEV Bot activities.
The average gas fee on Ethereum has come down to $7.34, almost one-third from last month’s high of $20. In terms of Gwei, a denomination of Ether (ETH) that represents one-billionth of one ETH, the daily median gas price has decreased to 24 gwei from a peak of almost 140 gwei last month, according to data from Dune Analytics.
The meme coin frenzy started in late April and took center stage in May leading to multiple new memecoins hitting the markets such as Aped, Bobo and a few others. The dominance of memecoins was so high in network activity that it created an unusual shift in the top 10 gas-burning altcoins. Instead of ETH, WETH, or USDT, memecoins such as TROLL, APED and BOBO became the top 10 spenders.
⛽️ 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. Read our latest deep dive. https://t.co/7SlmJ59k2m pic.twitter.com/Y2kaLKZTrL
— Santiment (@santimentfeed) April 19, 2023
Another prominent reason for the rise in the gas fee of Ethereum was the surging popularity of these meme coins on the decentralized platforms as mainstream centralized exchanges took some time to list them.
May was not just about meme coin frenzy on Etheruem, in fact, the Bitcoin network’s latest layer-2 solution in the form of Ordinals also gained significant popularity. Ordinals enable decentralized storage of digital art on the Bitcoin blockchain. As a result, the Bitcoin network registered many new meme coins, with Pepe coin gaining a billion-dollar market cap.
Bitcoin Ordinals was introduced in January earlier this year and by the end of May, the number of Ordinal inscriptions on the Bitcoin blockchain surpassed 10 million. The total fee paid for Ordinals inscription rose by 700% in May and currently sits at 1,639 BTC.
With the meme coin frenzy cooling down, the Ethereum gas fee has cooled while the number of inscriptions on Ordinals has also come down significantly.