As the popularity of the frog-themed token Pepecoin (PEPE) surges in the crypto sector, Ethereum's transaction costs have reached a new high due to the latest mania over the token. According to on-chain data, 31,700 Ethereum (ETH) has been burned in the last week, leading to a spike in transaction fees.
The PEPE token has gained immense popularity, experiencing a remarkable surge in value over the past few days. In just one week, the token has gained an incredible 665%, while rising 585% in the last two weeks. The token's popularity is reflected in its trading volume, which has exceeded that of WBTC and USDT, a stablecoin, on Uniswap, reaching an impressive $150m in just 24 hours.
As more investors flock to PEPE, its value has continued to soar, reaching an impressive market value of $879m in the latest trading session. This frenzy has led to a FOMO among investors, causing a rapid rise in Ethereum's gas fees.
Despite Ethereum's upgrade via EIP-1559, which resulted in a portion of all Ethereum transactions being burned, transaction fees continue to rise. In 2021, Ethereum was upgraded via EIP-1559, making the coin deflationary. As network activity increases, more ETH is destroyed, but transaction fees continue to rise.
As a result, there has been a corresponding increase in gas fees on layer-2 platforms like Arbitrum and Optimism. The PEPE craze has led to a hard fork in Ethereum's gas fees, with the daily median gas price rising to a 12-month high of 87 gwei, equivalent to one billionth of an ether (ETH).
The rise in gas fees has had a significant impact on Ethereum's users, who have expressed their frustration with the high transaction costs. The Ethereum community has been discussing potential solutions to address the issue, with some suggesting that the network could benefit from layer-2 scaling solutions and other optimization techniques.
