The Doge effect is sending Ethereum transactions fees up the proverbial tree.

Per data from BitInfoCharts and Blockchair, the average cost of an Ethereum transaction is currently $64, partly driven by demand for the Ethereum token (and Dogecoin doppelganger) Shiba Inu (SHIB) – and its own copycats. Binance exchange CEO Changpeng Zhao tweeted that the platform “ran out of ETH (-1.4%) deposit addresses due to SHIB,” which “has never happened before for any ERC20 token.”

Ethereum’s fees, called gas, are priced in ETH and vary depending on the type of transactions; for example, a simple transfer costs less gas because it is less computationally intensive, while a transaction to swap, say, ETH for WBTC (-0.04%) would cost more.

SHIB was created last year, but the renewed trading interest appears to only be driven by speculation that the coin will mimic Dogecoin’s stupendous success (this success has come to pass, as SHIB is up 36,750% in 30 days, fueled by exchange listings at Binance, OKEx and Huobi). Dogecoin has become a favorite of TikTok influencers and the world’s second richest man, Elon Musk. 

Nipping at the heels of both DOGE (+9.02%) and SHIB’s success, other imitators have cropped up recently.

Most of these would-be doge-eat-doge projects are spun up on Ethereum as ERC20 tokens, the most popular token design for Ethereum which led to the mushrooming of ICOs in 2017.

In 2020 and earlier this year, it was not uncommon for Ethereum fees to go vertical as use of DeFi platforms grew. But this new fee pressure, rather than resulting from use of actual smart contract platforms, seems to come largely from traders speculating on a litter of dog coins.

All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Scam Alert: How to avoid trouble on Terra’s LUNA 2.0 airdrop

Scam Alert: How to avoid trouble on Terra’s LUNA 2.0 airdrop

The LUNA hard fork is set to occur on May 28, followed by the subsequent airdrop of LUNA 2.0 tokens to eligible holders. Ahead of the real LUNA 2.0 airdrop, some scammers have tried to lure LUNA and UST holders to send their assets in lieu of receiving the new tokens. 

More Terra News

Bitcoin Weekly Forecast: On-chain metrics support multiplying downside threats

Bitcoin Weekly Forecast: On-chain metrics support multiplying downside threats

Bitcoin price consolidates above a weekly support level after the LUNA-induced crash on May 12. This coiling price action could cause BTC to trigger a move to the downside, further deepening the woes of investors.

More Bitcoin News

This Web3 move by Crypto.com could be a good bet for patient investors

This Web3 move by Crypto.com could be a good bet for patient investors

Crypto.com price stabilization on a high time frame chart indicates that a bottom formation could be taking place. This pattern combined with a bullish signal from a momentum indicator adds credence to the possibility of a reversal and a recovery rally for CRO.

More Crypto.com News

Why Elon Musk’s tweet failed to move Dogecoin price

Why Elon Musk’s tweet failed to move Dogecoin price

Dogecoin price slipped up as Bitcoin price triggered a sudden crash on May 26. This downswing, while serving as a great opportunity to accumulate DOGE, failed to recover alongside BTC.

More Dogecoin News

Bitcoin: On-chain metrics support multiplying downside threats

Bitcoin: On-chain metrics support multiplying downside threats

Bitcoin price consolidates above a weekly support level after the LUNA-induced crash on May 12. This coiling price action could cause BTC to trigger a move to the downside, further deepening the woes of investors.

Read full analysis

BTC

ETH

XRP