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Ethereum gas fees hit $84M last week, thanks to the ERC-404 hype

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An average ERC-404 transaction required three times the gas required for an average NFT transaction.

Ethereum network fees surge

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  • Gas price paid per transaction bounced to levels last seen during the memecoin frenzy of May 2023.
  • ETH witnessed a minor retracement in the last 24 hours, dropping below $2,800.

Transaction costs on Ethereum [ETH] rose to a 9-month high, spurred largely by the hype in the experimental token standard ERC-404.

Users make a beeline for ERC-404 transactions

As per on-chain analytics firm IntoTheBlock, the network collected a total of $84 million in gas fees the past week, marking a 61.5% jump from the week before.

In fact, average gas price paid per transaction bounced to 71 Gwei on the 9th of February, according to AMBCrypto’s analysis of Glassnode’s data. Such levels were last seen during the May 2o23 memecoin frenzy that saw the emergence of Pepe [PEPE] token.

Ethereum average gas price shoots up

Source: Glassnode

The spike came in the days following the launch of the first functional ERC-404 project, Pandora, which has seen extensive demand lately. As of this writing, the Pandora token was up 270% since its launch, according to CoinMarketCap.

For the curious, ERC-404 is a unique token standard, which combines the properties of ERC-20 (fungible tokens) and ERC-721 (non-fungible tokens). As a result, tokens under this standard are both fungible and non-fungible at the same time.

A special use case of this not-yet official token standard is that it can be broken down into fractions, effectively allowing multiple users to collectively own a single NFT.

An X user with a pseudonym PopPunk, who also happens to be a co-founder of gas auditing firm, stated that an average ERC-404 transaction required three times the gas required for an average NFT transaction. It was evidently clear that ERC-404 tokens were costing users a bomb.

Meanwhile, AMBCrypto also observed a spike in daily on-chain transactions over the week, to the tune of 17%. In fact, about 1.15 million transactions were settled on the 16th of February, the highest for the month.

Ethereum transactions increase

Source: Glassnode


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ETH pulls back but market appetite grows strong

As of this writing, the second-largest crypto was exchanging hands at $2,790, according to CoinMarketCap. ETH witnessed a minor retracement in the last 24 hours, dropping below $2,800.

The broader market sentiment was one of “extreme greed”, as per the reading from Ethereum Fear and Greed Index, suggesting substantial FOMO among market participants.

 

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Aniket Verma works as a journalist at AMBCrypto. Contrary to most who are primarily interested in merely tracking price movements of cryptos, his focus is on examining the niche intersection between cryptocurrencies and traditional finance. A so-so Bitcoin maximalist, Aniket has a strong disdain for memecoins and the unfounded frenzy they seem to generate every market season. Coming from a strong engineering background, Aniket previously worked as a Content Manager for TV9 Network. Before his stint over there, he was an Associate Multimedia News Producer at Reuters.
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