Gas Fees Skyrocket as Memecoin Bots Battle for Supremacy

Ethereum’s highly anticipated Dencun upgrade aimed to revolutionize its Layer-2 ecosystem, promising reduced gas fees and increased scalability. However, trading bots have disrupted this vision, driving Base gas fees above $2 and rendering the upgrade ineffective.

Dengcun Upgrade Leads to Soaring Infrastructure Costs, Attracting Attention in Layer-2 Ecosystem

Initially, the Dencun upgrade delivered on its promises, slashing Base gas fees by 99% and boosting daily transactions fivefold. This sparked excitement within the Layer-2 ecosystem, especially for platforms like Base, which saw a surge in activity.

Despite the initial success, gas fees on Base skyrocketed by 2000% on March 20, peaking at $2 due to network congestion. While fees briefly returned to normal levels, hitting $0.2, they surged again over the weekend, reaching $1.9—an 1100% increase. Notably, other Layer-2 networks maintained lower and stable gas fees.

High-Frequency Trading Bots Manipulate Base Network: Data Shows Meme Coin Trades Caused Fee Surge

Data analyst Michael Silberling uncovered the cause behind Base's fee surge: three anonymous contracts engaged in high-frequency memecoin trading. These trading bots targeted memecoins, driving up demand and gas prices on Base.

The surge in Base's gas fees underscores how trading bots can manipulate prices on the network, undermining the Dencun upgrade's intended impact. Despite efforts to reduce fees and enhance scalability, Base's case highlights the vulnerability of Layer-2 networks to manipulation.

Experts Warn That the Meme Coin Craze Could Lead to Rising Transaction Fees on Second-Layer Networks

While memecoins have surged in popularity, experts warn of potential fee increases as more chains join the ecosystem, saturating the fee market.

The spike in Base's gas fees demonstrates the susceptibility of Layer-2 networks to manipulation by large wallets leveraging trading bots. Despite advancements in scalability, the incident raises concerns about the resilience of these networks to external disruptions.