The sudden surge in ethereum network gas fees is attributed to the craze in meme coins. Over the past week, average Ethereum network fees have spiked by 470% to a record high on May 11 and they are not looking like slowing down. Today the average gas fee is over $70, hitting an all-time high almost double the previous one in late February when they reached $40.
Eth Gas Station is currently reporting a record $200 average price for carrying out a token swap on Uniswap, and a gas cost as high as $240. Adding or removing liquidity to a DeFi smart contract can cost as much as $210.
Trustnodes has correlated this surge in gas fees and network congestion with the growing meme token craze that was initiated by Elon Musk’s shilling of Dogecoin. There are now more than 5 DOGE-inspired coins floating in the market and cause congestion.
The major culprit here is the self-proclaimed “Dogecoin Killer”, Shiba Inu (SHIB) token. The only thing it is killing right now is the Ethereum network.
The pump and dump game is on and it is created a FOMO effect in the market that is triggering hype and speculation for investors to make quick money. Most of them lost when the tokens predictably dumped. After heavy pump, the useless DOGE clone meme coin SHIB has dumped 30% on the day according to Coingecko.
Another doggie meme coin launched just today is Woofy from Yearn Finance. Again, FOMO-driven speculators jumped onto the hype and pushed YFI to an all-time high of $90,000 this morning in anticipation of an airdrop that was nothing more than a rumor spread on social media.
Woofy is a low-priced, high circulation token designed for YFI holders to redenominate their assets. Of course, following the doggie meme theme has sent YFI to the moon, intentionally or not.
However, this is a temporary issue and it will ease eventually by increasing the network through the rollout of second layers. But I will highly recommend readers to be careful while trading with these coins. They are USELESS.