Why PEPE the Frog Coin Causes Unusually High Ethereum Gas Fees

Unlike major ERC-20 tokens like USDT, USDC, or WETH, which are often traded in large, infrequent transactions, PEPE is mostly traded in high-frequency, small-value transactions on decentralized exchanges (DEXs) like Uniswap.

Ethereum gas fees are directly influenced by network demand, and certain tokens, like PEPE, have consistently caused extreme gas spikes compared to other ERC-20 tokens. This phenomenon can be attributed to a unique combination of factors related to PEPE's trading behavior and smart contract design. Here's a deeper analysis of how PEPE drives gas fees higher than other tokens.

1. PEPE’s Extreme Trading Volume on Decentralized Exchanges (DEXs)

Unlike major ERC-20 tokens like USDT, USDC, or WETH, which are often traded in large, infrequent transactions, PEPE is mostly traded in high-frequency, small-value transactions on decentralized exchanges (DEXs) like Uniswap.

How This Increases Gas Fees:

✅ Uniswap swaps require more gas than simple token transfers (DEX interactions involve smart contracts, increasing complexity).

✅ PEPE’s volatility causes rapid buying and selling, increasing demand for transactions.

✅ More transactions = higher network congestion, making users bid more gas to prioritize their trades.

Real-World Example:

🔹 During PEPE’s peak trading volume in April–May 2023, Uniswap swaps for PEPE accounted for over 30% of all Ethereum transactions, leading to gas fees exceeding $100 per swap.

In contrast, stablecoins like USDT or USDC are mostly used in large, single transfers, which require much less gas and don’t cause as much congestion.

2. The FOMO Effect: PEPE’s Retail Appeal Draws Thousands of Transactions

PEPE is a meme coin, meaning it attracts a different crowd compared to traditional Ethereum-based tokens. Retail investors, often driven by FOMO (fear of missing out), create a trading frenzy, further driving up gas fees.

How This Increases Gas Fees:

✅ Retail traders place many small orders instead of a few large trades, leading to more transactions overall.

✅ Higher transaction volume fills Ethereum blocks quickly, forcing traders to outbid each other on gas prices to get their transactions processed faster.

✅ Bot activity & sniping add more congestion, as automated trading bots spam the network with rapid transactions.

Comparison With Other Tokens:

🔹 ETH & blue-chip ERC-20 tokens (e.g., LINK, UNI) → Traded in larger blocks, meaning fewer but higher-value transactions.

🔹 PEPE & other meme coins → Traded in smaller, high-frequency transactions, leading to thousands of gas-consuming trades per hour.

This retail-driven micro-trading leads to Ethereum network congestion, increasing gas fees for all users.

3. PEPE’s Smart Contract Inefficiencies Compared to Standard ERC-20 Tokens

Not all ERC-20 tokens use optimized smart contracts, and PEPE’s contract is less efficient than those of stablecoins or blue-chip tokens.

Why PEPE’s Contract Consumes More Gas:

🔸 Additional security & anti-bot mechanisms → PEPE’s smart contract has built-in protection against bots, which can make transactions more complex.

🔸 More contract interactions per trade → Every time PEPE is bought/sold, more computational steps are required than in standard ERC-20 transfers.

🔸 DEX liquidity pool mechanics → PEPE’s main trading venue is Uniswap, which requires more computational steps than centralized exchange trading.

Gas Cost Comparison (Typical Transactions):

💡 Insight: A single PEPE trade can use 2-3x more gas than an ETH or stablecoin swap, leading to higher fees across the Ethereum network.

4. Bot Wars: Automated Trading Bots Contribute to Gas Spikes

PEPE’s explosive price moves have made it a prime target for MEV (Maximal Extractable Value) bots, which seek to exploit price inefficiencies. These bots aggressively compete for priority transactions, further increasing gas fees.

How Bots Contribute to Higher Gas Fees:

✔️ Front-running transactions → Bots pay extra gas to place their trades before retail traders.

✔️ Sandwich attacks → Bots execute multiple transactions in one block to profit off price fluctuations, further clogging the network.

✔️ Sniping PEPE liquidity pools → Bots spam Ethereum with thousands of rapid transactions, competing for liquidity and causing gas price spikes.

🔹 Example: During PEPE’s peak, MEV bots spent millions of dollars in gas fees to execute profitable arbitrage and front-running trades, making the situation even worse for regular users.

5. High On-Chain Trading Activity Compared to CEX-Traded Tokens

Unlike major ERC-20 tokens like AAVE, UNI, or LINK, which are primarily traded on centralized exchanges (CEXs), PEPE was initially only available on DEXs. This meant every PEPE trade had to be processed on-chain, consuming Ethereum’s block space.

Why