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Ethereum (ETH) experienced a sharp decline in fee revenue this week, indicating a decrease in network traffic and user participation. According to the on-chain analysis firm IntoTheBlock, Ethereum validators collected a total of $116 million in fees over the week, representing a significant decrease of 41.2%.
Investor Interest in Meme Tokens Wanes
The collapse in cryptocurrency occurred following a decrease in meme token transactions on the network, a domain historically dominated by Ethereum. Transaction volumes for leading Ethereum-based cryptocurrencies such as Pepe (PEPE), Shiba Inu (SHIB), and Floki Inu (FLOKI) decreased significantly throughout the week.
According to data from analytics firm Santiment, this happened after a period of high demand in the first half of the month. The ongoing meme token frenzy, which excited the markets, also reflected in the decreased trading volumes on Ethereum-based decentralized exchanges (DEX), commonly used by cryptocurrency entities for token trading. An analysis related to DeFiLlama data suggests that Ethereum DEXs achieved just over $15 billion in volumes during the week, which could indicate a 25% decrease compared to the previous week.
Transaction Fees on Solana
The decline occurred as investors shifted their meme token enthusiasm towards the Solana (SOL) blockchain. Solana’s total DEX volume increased by 3% over the week. The creation of new meme tokens on the network throughout the week attracted more users and, consequently, more revenue. Solana offered a faster and cheaper alternative compared to Ethereum.
The average transaction fee paid by Solana users in the last 24 hours was $0.027, based on SOL’s market value at the time of writing. On the other hand, Ethereum charged an average of $1.19 to validate a transaction. The decrease in on-chain traffic could mean fewer native ETH tokens being moved and, therefore, a decrease in demand. According to the website 21milyon.com, this partially contributed to a 5% decrease in its value over the week.
