Ethereum Network Fees Experience Significant Growth In 2023 Q2, Here’s Why

The Ethereum ecosystem had a constructive run within the second quarter of 2023. From the Shapella improve in April to Might’s memecoin frenzy, there was a whole lot of buzz surrounding essentially the most outstanding sensible contract blockchain.

This was mirrored within the community’s on-chain exercise and fuel charges. In accordance with the quarterly report by blockchain analytics firm IntoTheBlock, Ethereum recorded an 83% enhance in community charges previously three months.

Ethereum Community Charges Surge Due To Memecoin Frenzy

The community payment surge skilled by the Ethereum community has been linked to the rise of Ethereum-based memecoins within the Q2 of 2023. In the previous few months, new memecoins, like APED, BOBO, PEPE, and many others., have taken over the market, with a few of these tokens recording big positive aspects.

In accordance with an IntoTheBlock report, speculative exercise within the memecoin market is without doubt one of the main forces behind the elevated Ethereum community charges. 

The influence of memecoins on Ethereum’s community exercise was so excessive that it precipitated a shift within the high gas-burning altcoins sooner or later in April.  Meme tokens, equivalent to TROLL, APED, and BOBO, had been amongst the highest 10 gas-burning altcoins,  displacing widespread belongings, like ETH, Wrapped ETH (WETH), and USDT, from their positions, in response to a Santiment analysis.

Curiously, Bitcoin additionally noticed elevated community charges in 2023’s second quarter, ensuing from creating tokens by way of the BRC-20 commonplace. IntoTheBlock’s report revealed that Bitcoin charges elevated by over 300% within the second quarter – the very best since Q2 2021.

Quarterly Replace: #Bitcoin transaction charges elevated 4x in comparison with final quarter, marking the very best enhance since Q2 2021. The surge is primarily pushed by Ordinals-related exercise.
Keep tuned, we’ll share extra updates on this previous quarter within the coming days. pic.twitter.com/sUuilxWBNN

— IntoTheBlock (@intotheblock) June 30, 2023

It’s value noting that the Ethereum community charges have cooled for the reason that Might highs, returning to a variety of 15-20 Gwei in current weeks.

ETH Provide Reached All-Time Low In Might

Whereas Ethereum’s community charges rose in Might, the provision of Ether tanked, reaching its all-time low. In accordance with IntoTheBlock’s evaluation, Ether’s annualized internet issuance fee dropped as little as 3.75% through the memecoin frenzy. 

Following the Merge last September, the quantity of ETH issued per block dipped by 90%, making Ether extra susceptible to deflation throughout payment spikes. Notably, the ETH provide development has stabilized for the reason that community charges dropped again into the traditional vary.

Supply: IntoTheBlock

In accordance with CoinGecko knowledge, ETH trades at $1,935, gaining 4.6% previously 24 hours. The token is the second-largest cryptocurrency, with a market cap of roughly $233 billion.

ETHUSD buying and selling at $1,922 | Supply: ETHUSD chart from TradingView