Coinfeeds Daily → ETH Gas Fees Hit 8-Month high Amid ERC-404 Craze

ETH Gas Fees Hit 8-Month high Amid ERC-404 Craze

Published: Feb 12, 2024 | Last Updated: Feb 12, 2024
Howard Kane
The Ethereum logo anthropomorphized with hands and legs, filling up gas at a station
Image: The Ethereum logo anthropomorphized with hands and legs, filling up gas at a station

Ethereum Gas Fees Surge

The popularity of the ERC-404 token standard has had a significant impact on the Ethereum network. Gas fees, which are payments made by users to compensate for the computing energy required to process and validate transactions on the Ethereum blockchain, hit an eight-month high. The average gas price peaked at 70 gwei, with the highest surge reaching 377 gwei. This increase in gas fees is attributed to the ERC-404 standard, which facilitates fractional ownership of Non-Fungible Tokens (NFTs) by binding ERC-721 NFTs to ERC-20 tokens. The Pandora project's launch of this standard has led to substantial trading volumes and increased network activity despite the high gas costs.

From 1 ETH to $59k

An unknown trader managed to turn 1 Ethereum (ETH) into approximately $60,000 in just 11 hours. This remarkable feat was achieved through trading a new ERC-404 token called MINER.

The journey began when the trader withdrew 1 ETH from the cryptocurrency exchange Binance. With a small portion of that ETH and a high gas fee, the trader bought 1073 MINER tokens. Later, a part of these tokens was sold for 19.11 ETH, leaving the trader with 350 MINER tokens valued at about $15,000. In total, the trader's series of transactions netted a profit of $59,000.

The Rise and Fall of ERC-404 Tokens

However, the excitement around ERC-404 tokens was short-lived. After the initial craze, which saw tokens like Pandora, DeFrogs, and Rug gain popularity, the market experienced a downturn. Data from CoinMarketCap indicates that the market capitalization across tokens in this sector is now down by 33.1%. This decline came after the tokens' trading frenzy sent Ethereum gas fees soaring, highlighting the volatile nature of the cryptocurrency market.

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