- The latest trend in blockchain, the Ordinals craze, is leading to soaring gas fees on Ethereum Virtual Machine (EVM) networks. Users are creating unique on-chain tokens, driving the demand for blockchain space and pushing up transaction costs.
- December 16 marked a historic spike in gas fees on EVM chains, with Avalanche spending over $5.6 million, leading to network congestion and significant disruptions, including a notable outage on the Arbitrum One network.
- The phenomenon is not just limited to EVM chains. Bitcoin’s network also experienced an increase in transactions, pushing fees higher and making small transfers costly, highlighting a growing interest in NFTs and on-chain token creation.
The recent buzz in the cryptocurrency world is about a new kind of digital token creation that’s causing a big increase in the cost of doing things on several blockchain networks. On December 16, this activity reached a new peak, with a whopping $8.3 million spent just on these special tasks, according to data from Dune Analytics.
Surge in Gas Fees
The biggest spender of the day was the Avalanche network, using over $5.6 million, followed by Arbitrum One with $2.1 million. Even more interesting, a large part of the daily activity on these networks was dedicated to this new trend. For example, BNB Chain devoted 73% of its transactions to it.
Network Challenges
This high demand for creating these new digital tokens is also causing problems. On December 15, the Arbitrum One network had to stop working for 78 minutes because of too much traffic. Bitcoin’s network faced similar issues, with unconfirmed transactions going over 280,000, as seen on mempool.space.
These tokens, similar to the Ordinals on Bitcoin, are like special, one-of-a-kind digital collectibles made by adding data directly into transactions. This popularity has led to Bitcoin fees reaching $37, making it hard for many people to use the network for small payments. However, a big name in Bitcoin, Adam Back, thinks that these high fees will actually help in making new and better solutions.
Continuing High Interest in NFTs
An expert pointed out that just one collection of these new digital collectibles did more business in one day than some of the most famous ones like CryptoPunks and Bored Apes. For instance, Bitcoin Frogs made a massive $48 million in sales on December 17, according to CryptoSlam.
The excitement around creating these tokens on Bitcoin and EVM chains shows no signs of slowing down. This ongoing frenzy is not only increasing the demand for space on networks like Bitcoin, Ethereum, and Avalanche but also causing issues like higher fees, network stoppages, and long waits for transactions. However, those who make these networks see this as a chance to develop new solutions, like layer-2 protocols, to handle the high demand for making tokens directly on the blockchain.
