Ethereum Gas Fee Surges to 12-Month High as PEPE Frenzy Grips Market

Users pay the fees, measured in fractions of ether (ETH) known as gwei, to execute transactions on the smart contract blockchain.

AccessTimeIconMay 5, 2023 at 9:08 a.m. UTC
Updated Jan 24, 2024 at 12:31 a.m. UTC

Ethereum is becoming costlier to use as the latest meme coin mania has investors churning millions for a frog-themed token called pepecoin (PEPE).

The daily median gas price, or transaction cost, hit a 12-month high of 87 gwei – one gwei is a billionth of an ether (ETH) – early this week. The value has increased more than 50% since the launch of the PEPE token on April 18, according to pseudonymous analyst @hildobby's Ethereum Gas tracker on Dune Analytics. At one point on Monday, the one-minute median gas price surged well past 150 gwei.

The increase represents strong demand for the Ethereum network, mainly from meme-coin traders, according to analytics firm CoinMetrics.

As bitcoin (BTC) "births a nascent memecoin scene, the ETH ecosystem continues to crank out multi-million dollar altcoins," CoinMetrics said in a weekly note sent to subscribers on Thursday. "ERC-20 heavyweight PEPE ('the most memeable memecoin in existence') soared +300% over the weekend, snagging a near-$600M fully-diluted valuation."

Rising gas price represents an increased demand for Ethereum. (@hildobby, Dune Analytics)
Rising gas price represents an increased demand for Ethereum. (@hildobby, Dune Analytics)

Such has been the pepecoin frenzy that leading Ethereum-based decentralized exchange Uniswap's pepecoin-wrapped ether (PEPE-WETH) liquidity pools recently became the most active liquidity pool by the number of transactions.

According to data tweeted by Scimitar Capital's Alex, PEPE traders have accounted for more than 410,000 transactions on Uniswap, burning about $10 million worth of gas.

PEPE surpassed the $500 million mark in market capitalization within three weeks of the launch. Similar frenzied activity has been seen other smaller coins. For instance, CHAD and 4TOKEN have rallied 450% and 250% in one week, while DINO has risen 500% in two weeks.

Edited by Sheldon Reback.


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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.