LIVEEthereum Network Revenue Surges to Two-Year High Amid Meme Coin Frenzy
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According to CoinDesk, the Ethereum network's revenue reached nearly two-year highs this week, driven by increased speculation with meme tokens. Data from IntoTheBlock shows that Ethereum mainnet's revenue from network fees reached $193 million this week, the highest figure since May 2022 and a 78% increase from last week. Ethereum-based meme tokens such as pepe (PEPE), shiba inu (SHIB), and floki (FLOKI) more than doubled in price over the past week, boosting on-chain activity.
Trading volumes on decentralized exchanges (DEX) built on top of Ethereum jumped 40% to $20 billion this week, according to DefiLlama data. The frenzy is benefitting investors who hold ether (ETH), the network's native token, due to its token burning scheme. After Ethereum's transition to a proof-of-stake blockchain, the network destroys a part of the transaction fees paid by users, decreasing the token's supply. Over the past week, ETH's supply shrunk by approximately 33,400 tokens (worth roughly $130 million at current prices) and is deflationary at a 1.45% annualized rate, according to Ultrasound.money data.
However, the heightened activity has made the blockchain very pricey for users. Average transaction costs (gas fees) on Ethereum rose to as high as $28 this week, making it unusable for many users, IntoTheBlock noted. Fees on layer 2s, designed to scale the Ethereum network, also surged, with transactions costing as much as $1 on Arbitrum, the highest since 2022. The upcoming Dencun upgrade is expected to lower transaction costs on layer 2s to cents. Ether briefly topped $4,000 on Friday for the first time since late 2021 but tumbled over 4% along with bitcoin (BTC). Recently, ETH changed hands at around $3,900, up 15% this week, in line with the broad-market CoinDesk 20 Index's (CD20) advance.
