Base Gas Fees Surge, Raising Doubts About Dencun's Low-Cost Promise

Base gas fees have spiked 2000% since Ethereum's Dencun upgrade, reaching pre-upgrade levels. A few traders using bots to engage in high-frequency memecoin trading are driving the surge, artificially inflating demand and setting higher gas fees for priority. Despite the Dencun upgrade's promise to reduce fees on Layer-2 networks, this case highlights how bots can undermine its impact, raising concerns about the scalability and fairness of the network.

Did Base's Gas Fees Defy the Dencun Promise?

The much-anticipated Dencun upgrade on Ethereum promised a new era of low-cost transactions on Layer-2 platforms like Base. But a recent surge in gas fees has raised questions about whether that promise has been fulfilled.

Memecoins: The Hidden Culprit?

Data sleuths have uncovered a connection between the gas fee spike and a flurry of high-frequency memecoin trading. Bots appear to be driving up the demand for memecoins, leading to higher gas prices as traders seek to execute their trades quickly.

Bots Manipulating the Market?

Experts suggest that the influx of trading bots on Base has created artificial demand for memecoins, resulting in inflated gas fees. This highlights how larger wallets can manipulate prices on the network by boosting demand through automated trading.

Is Layer-2 Scaling at Risk?

The Dencun upgrade aimed to scale up Layer-2s by reducing fees. However, Base's case demonstrates how bots can quickly undermine the benefits of reduced fees. As more chains join the Layer-2 ecosystem, the fee market may become more saturated, leading to higher fees once again.

A Lesson Learned for Layer-2 Networks

The surge in Base's gas fees serves as a cautionary tale for Layer-2 networks. It highlights the need for mechanisms to prevent bots from manipulating prices and undermining the intended benefits of scaling solutions.

Ripple Devs Issue Warning on XRPL AMMs

Ripple developers have urged users to exercise caution when using newly released automated market makers (AMMs) on the XRPL. Concerns have been raised about potential security risks associated with these platforms.

Bitcoin ETFs See Net Outflows

Bitcoin exchange-traded funds (ETFs) experienced net outflows during the past trading week. This coincides with a pullback in Bitcoin's price, suggesting that investors may be taking a more cautious stance.