The memecoin fever pushed Ethereum network fees to their highest level in nearly 2 years

As IntoTheBlock noted in a market report on Friday, Ethereum network revenue rose to a nearly two-year high this week as a speculative craze for memecoins fueled blockchain activity.

IntoTheBlock data shows that Ethereum mainnet network fee revenue reached $193 million this week, the highest since May 2022 and up 78% from the previous week.


Daily revenue from Ethereum network fees | Source: IntoTheBlock

IntoTheBlock analysts say on-chain activity is largely driven by growing memecoin speculation. Ethereum meme tokens like PEPE, SHIB, and FLOKI have more than doubled in price over the past week.

Meanwhile, trading volume on decentralized exchanges (DEXs) built on Ethereum rose 40% to $20 billion this week, DefiLlama data shows.

This craze is benefiting investors holding ETH thanks to the token burning plan. Once Ethereum switches to a PoS blockchain – commonly known as The Merge – the network will cancel a portion of the transaction fees paid by users, reducing supply.

Over the past week, ETH's supply has decreased by about 33,400 tokens (worth about $130 million at current prices) and deflated at an annual rate of 1.45%, according to Ultrasound.money data.

On the other hand, increased activity has made blockchain very expensive for users. IntoTheBlock noted that the average transaction cost (gas fee) on Ethereum increased to $28 this week, leaving many users “unable to use it.”

The report said fees on layer 2 designed to scale the Ethereum network also increased sharply, with transactions costing up to $1 on Arbitrum, the highest since 2022. However, this problem has been quickly fixed with the upcoming Dencun upgrade coming next week, which is expected to reduce transaction costs on layer 2.

ETH briefly hit $4,000 on Friday for the first time since late 2021, but fell more than 4% along with Bitcoin. Currently, the price trades around $3,935, up 15% this week, in line with the CoinDesk 20 Index (CD20) gain in the broader market.