A trader recently paid approximately $120,000 for a single transaction on the Ethereum network as gas fees continue to surge. While the Ethereum network is familiar with high gas fees, instances of such high fees have been increasingly rare since the shift from the proof-of-work (PoW) protocol to the proof-of-stake (PoS) consensus algorithm.
Ethereum’s average transaction fee at the beginning of 2021 was around $1.9, which steadily rose to $4 by February. However, as of writing, the average transaction fee on the Ethereum network is around 0.012 ETH or roughly $22.
The resurgence of high gas fees on the Ethereum network may be attributed to a surge in meme coin hype, which led to intense network activity and clogged the system over the weekend. This hype saw trading volumes on decentralized exchanges surge, leading to heightened activity from Maximal Extractable Value (MEV) bots.
An MEV bot is designed to maximize the amount of value that can be extracted from every block on the Ethereum network by influencing its content or order. These bots can take advantage of decentralized exchange arbitrage opportunities or execute sandwich attacks.
Despite the high gas fees, a trader managed to profitably close a deal on the Ethereum network. The trader spent 64 ETH in fees to buy an altcoin called FOUR, which gave them 84 ETH worth of the cryptocurrency. In total, the trade made them a profit of over $580,000. The trader's wallet currently holds a number of little-known digital assets, as well as over 100 ETH, which they are seemingly ready to deploy on newly minted cryptocurrencies to earn a profit.
High gas fees on the Ethereum network can have an impact on forex trading as it can affect the transaction costs of trading cryptocurrencies, including altcoins. Traders should take these fees into consideration when deciding to trade on the Ethereum network. Additionally, the use of MEV bots can also have an impact on the volatility of cryptocurrencies and, as a result, the forex market. It is essential for traders to keep track of these developments to make informed trading decisions.