It is not just the Ethereum blockchain that is in demand. This week, the record number of transactions was also set on the Bitcoin network, which managed 682,000 transactions on May 1.

Given the load on the network, it is quite predictable that fees have also risen, reaching a two-year high. As experts say, this is due to popularization of NFT on the basis of the Ordinals protocol. As of yesterday, 206 thousand such tokens were created in BTC blockchain.

As a result, Glassnode analysts noticed that the share of transaction fees in total miners’ income reached 12.4 percent. Such a level is quite high, and the only time it was higher was during the 4.9 percent of the Bitcoin network days. Here is the corresponding graph.

And if the growth of commissions in the BTC blockchain is provoked by NFT, in the case of Etherium meme-tokens are “to blame”.

Why Ethereum has high commissions

We checked the actual data: today, the commissions on the Etherium network are at an unbelievable level. In particular, in the daytime, a quick transaction on the blockchain needs to be priced at 136 gwei. At these rates, an ETH transfer would cost the equivalent of $5.6, whereas to send an ERC-20 standard token would have to shell out almost $15.

Selling NFTs on the OpenSea trading platform is valued at nearly $20, while exchanging them on the Uniswap decentralized exchange would cost nearly $50.

To recap, gwei or gwei is the smallest indivisible part of 1 ETH. Each transaction in the Ether network costs a certain amount of gwei, and the gwei itself is valued just in gwei.

The main reason for the rise in commissions is the hype around the Pepe meme coin, which is based on the popular internet meme “Pepe the frog”. In the last week alone, the value of Pepe has risen by 917 per cent, reports The Block. Meanwhile, according to the CoinGecko platform, the rate has increased by 4246 percent since April 18, 2023.

Most of Pepe’s trading volume is conducted on decentralised exchanges, which “load up” the Etherium blockchain when activity is high. However, the coin’s popularity makes it a desirable tool for traders, which could soon lead to Pepe being listed on all major exchanges.

The listing of Pepe was announced today by Binance and KuCoin.

The fact that a coin is based on a meme doesn’t automatically make it “bad”, well there are no logical or illogical investments in the crypto world. For example, the Dogecoin token has been at the top of cryptocurrency capitalisation rankings for several years in a row. Perhaps Pepe could become its full-fledged alternative in the future.

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In the meantime, the hype around PEPE has reached such proportions that the token has started to attract people who have not previously interacted with the field of decentralised finance. The day before, cryptocurrency enthusiasts spotted such a case in the blcochain browser.

An unknown user wanted to buy PEPE, for which he withdrew 0.05 ETH from the Coinbase cryptocurrency exchange. This was the amount he used to purchase the meme token.

However, due to lack of experience, the user did not take into account the high fees in the Eth blockchain. He ended up spending almost $30 on the commission for exchanging ETH for 0.03 PEPE. And because the exchange rate of the latter is significantly less than one cent, the user essentially just threw away $30 for the sake of the transaction and got nothing in return.

Based on what is happening, an important conclusion can be drawn – as long as something is popular in crypto, leveraging a given asset due to serious volatility may very well prove fatal. For example, in the last 24 hours, the value of Pepe has risen by nearly 70 percent, with the rise in this case following a noticeable collapse. Such sharp swings led to the liquidation of a huge number of short positions in the altcoin. Data from CoinGlass shows that shorters lost at least $11 million on several exchanges in 24 hours.

Traders’ losses amounted to $5.5 million on cryptocurrency exchange OKX alone, with another $2.2 million liquidated on Huobi. About $3.6 million was liquidated on Bybit and several hundred thousand dollars on BitMEX. All of these exchanges started offering Pepe futures trading last week, Coindesk reported.

Trying to short Pepe even now remains dangerous. However, experts agree that a drop in the value of the altcoin is bound to happen as soon as most market players lose interest in it. This has happened with Doge many times before – such coins rise and fall in sharp spikes, which is suitable for short-term investments on the verge of a gambling addiction.

Until the collapse, the popularity of the PEPE meme coin is also actively affecting Etherium itself. Specifically, over the past week, 33,000 ethers have been burned on the Eth network as commissions. At the same time, nearly 155,000 ethers have been destroyed since mid-September 2022, when the blockchain switched to Proof-of-Stake. This translates into the destruction of 21 per cent of all coins in just 3 per cent of Eth’s total days on PoS.


We think the situation with commissions in the Etherium blockchain is rather sad. Sure, their growth means high demand for the network's resources, but exchanges on decentralised exchanges worth $50 are not something a novice cryptocurrency user can afford. Therefore, such surges may scare off users who have not yet discovered more affordable alternatives like Solana and Avalanche. The only thing left to do here is to wait for the implementation of sharding in the Eth network, which should finally increase the capacity of the blockchain.


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