The second quarter of the year has been marked by a flurry of eventful developments and significant trends in the crypto space. One notable trend is the remarkable surge in transaction fees observed on the Bitcoin blockchain.
About $186million has been paid in fees as curtains fall on Q2 2023. This is a huge leap from the $44.7m recorded in the previous quarter.
While its Q2 2021 high can be attributed to the bull run and institutional interests, this quarter’s hike in fees is due to the rise of Bitcoin Ordinals.
Ordinals allow users to inscribe audios, text, images etc on satoshis, thereby bringing NFT-inspired digital artefacts to the Bitcoin network. As is evident in the chart below, the popularity of Ordinals shot through the roof and is still on the rise, with total inscriptions till date surpassing 14 million.
Dune Analytics reports that Ordinals-related transactions alone accounted for over $55.2m in fees, with more than $51m paid in Q2. This represents approximately 27.4% of the total fees paid on the Bitcoin network during the quarter.
Many Bitcoin maximalists weren’t too happy with the Ordinals-induced transaction fee hike, but age-long advocate, Micheal Saylor insists that the rise in activity is beneficial to the network.
Memecoins drive Ethereum fees in Q2
The Ethereum blockchain recorded an 83% hike in transaction fees from the previous quarter. About $829m was paid in fees between April and June.
IntoTheBlock pinpoints memecoins as the primary catalyst, and there’s supporting evidence from Dune Analytics.
The chart below compares different crypto narratives in terms of DEX trading volume using five top coins in each narrative. Meme 2.0 dominated other narratives all through Q2 and at some point in May, it accounted for more than 80% of the entire trading volume on decentralised exchanges.
On 6/7 May, memecoins accounted for over 50% of all transactions, indicating substantial interest and activity.
This surge in transactions also resulted in a considerable amount of fees being paid on these memecoins, contributing significantly to the total fees generated on the Ethereum network in the second quarter.