Meme token hypothesis raises on-chain charges to report highs

Hypothesis on meme tokens is escalating dramatically on the cryptocurrency market, influencing on-chain exercise and transaction charges. This week, we delve into the efficiency of meme tokens and their influence on the blockchain ecosystem. Moreover, how the anticipated Dencun improve will help L2s in mitigating the sharply rising charges brought on by the latest meme coin mania will even be a topic of dialogue.

Throughout a strong crypto bull market, retail merchants are playing on riskier objects, inflicting meme tokens to extend in worth by a mean of drastically over the earlier month. The PEPE token led the climb with an unbelievable 600% month-to-month return, outperforming Ethereum-based tokens. 

Though PEPE has skilled a slight pullback, 91% of holders are nonetheless worthwhile, with solely 170,000 holders in comparison with SHIB’s 1.3 million and DOGE’s 6.3 million. In response to DeFiLlama, Solana-based tokens have a weekly DEX buying and selling quantity of about $15 billion, nearly equal to Ethereum’s whopping $20 billion.

Ethereum transaction charges have surged to ranges not seen in practically two years because of the emergence of the meme coin mania; they now surpass $190 million per week, indicating an annual run price in extra of $10 billion. The fee-burn mechanism of Ethereum depleted its provide by 33,000 ETH ($125 million) this week. Nonetheless, most customers have been deterred by the mainnet’s exorbitant transaction charges, which common $28. Concurrently, because the improve of Nitro, the charges for Arbitrum, a popular L2 resolution, have crossed $1.

The Dencun improve for Ethereum is scheduled for March 13. Proto-danksharding, or EIP-4844, shall be applied inside his framework. Proto-danksharding implements blobs, a novel transaction kind that considerably reduces the price of information availability for L2s. 

As OP stack chains grow to be extra environment friendly, market forecasts point out that the charges of the first L2s will lower by at the least 80%. This improve will facilitate operations, with charges for actions similar to USDC deposits on Aave doubtlessly reducing to $0.0091—a 27-fold discount. Polymarket projections even count on a 60-fold discount in L2 prices.

Though the exact magnitude of charge reductions after the Dencun improve remains to be unsure, one factor is definite: a paradigm shift is imminent for the blockchain system. The implementation of those upgrades is anticipated to scale back the value of gasoline, which has risen on account of the proliferation of social media tokens. Over time, this can result in a cheap platform aligned with the necessities of layer two networks.