Ethereum transaction fees at their highest since May 2022 amid memecoin mania

The median average transaction fee on Ethereum has risen to its highest level since May 2022 following increased on-chain activity. 

Fees on the Ethereum network jumped to around 87 gwei on May 2, according to a Dune analytics dashboard from Hildobby, a pseudonymous data researcher at VC firm Dragonfly. The increase was mostly down to memecoin trading, Hildobby told The Block. 

Memecoins have enjoyed somewhat of a renaissance recently. The Pepe the Frog-themed token has seen particularly high interest. The token price soared over 266 times in just four days last month.

The memecoin's market cap soared to over $500 million this week before crashing below $400 million again. Many of these tokens lack liquidity, or market depth, meaning the ability for traders to buy and sell close to the market price is limited — leaving coins susceptible to sharp price swings. 

The token is largely traded on decentralized exchanges, encouraging more on-chain activity. Decentralized exchanges on Ethereum have attracted the highest level of users since 2021 due to the demand for memecoin trading. Ethereum-based DEXs saw over 72,000 unique traders on one day in April, according to data from The Block Pro. 

Users look for alternatives

Ethereum Virtual Machine (EVM)-compatible blockchains hit all-time highs last week due to high transaction fees.

Daily new unique addresses of EVM-compatible blockchains reached 6.77 million on April 25, according to The Block's Data Dashboard. The previous record was over two years ago when it reached 6.74 million. 

The EVM-compatible blockchains include BNB Chain, Polygon, and Avalanche. These chains tend to have lower transaction fees than Ethereum.