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.
According to Bitinfocharts, the average transaction fee on the Ethereum network had fallen to around $12 this time last week. Today they are over $70, hitting an all-time high almost double the previous one in late February when they reached $40.
The analytics provider is reporting just the average price of using the network as some operations such as smart contract interactions or token swaps on decentralized exchanges can be much higher in terms of gas usage.
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.
Dodgy Doggie Coins Blamed
Posting a screenshot of one user paying $337 for a token swap on Uniswap, Trustnodes has correlated this surge in gas fees and network congestion with the meme token craze that was initiated by Elon Musk’s shilling of Dogecoin.
“The reason for this congestion seems to be some ‘meme’ tokens that are probably just organized opportunistic pumps and dumps.”
It added that the Shiba (SHIB) token appears to be one culprit who has described itself as a ‘Dogecoin killer.’ The only thing it is killing right now is the Ethereum network and probably the pocket of many, it added.
The scene today is reminiscent of the pump and dump patterns of the 2017/18 bull run in which FOMO gripped markets and speculators aped into tokens to ride the hype wave and make a quick buck. Most of them lost when the tokens predictably dumped.
Pumps and Dumps are Back
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.