Although Ethereum has been skyrocketing in terms of price and popularity lately, this has not stopped the gas fees from spiking as well. In fact, if investors were to use the ETH network nowadays, they would find gas fees to be astronomically high. High gas and transaction fees have plagued the world’s second-biggest cryptocurrency for a while now, and although there had been a hope that this would decrease in the near future thanks to the upcoming July update, for the moment, it would seem that the fees are not decreasing. In fact, it had been during the previous week that the network fees had actually surged by over 470%, thereby reaching an all-time high just yesterday.
It is with this in mind that numerous experts and analysts are blaming the various meme and ‘joke’ cryptocurrencies such as DOGE, SHIB, and SAFEMOON and the ridiculous craze around them as being the main reason for the recent spike.
From $12 to $70
Last week, the fees had decreased to just about $12. Now, the fees are above $70 and rising, which has sent alarm bells ringing for various exchanges and investors.
To make matters worse, it had been reported that an average price of $200 was required in order to conduct a token swap on DeFi protocol Uniswap, with the gas fee spiking to about $240. Furthermore, removing or adding liquidity to any decentralized finance smart contract may cost a fee of up to $210.
Meme coins to blame?
Many people claim that this congestion has been primarily caused by the recent explosion in popularity of meme tokens, which experts claim are possibly just being used for rapid pumping and dumping. This entire scenario is reminiscent of the same patterns observed in 2017-2018’s bull-run during which many investors bought coins that had little technology behind them and lacked a proper use case in favor of deriving a quick profit and avoiding FOMO. Interestingly enough, people don’t seem to learn from their past mistakes, as most of the investors who took part in the aforementioned bull run experienced significant losses.
It was Shiba Inu (SHIB) that had most recently taken the community by storm, which many have since dubbed as the ‘DOGE killer.’ However, it is the ETH network that is currently being ‘killed’ because of altcoins such as this. As of the time of this writing, SHIB is trading at $0.000027 after experiencing a 20% drop in the past 24 hours.