According to blockchain analytics firm IntoTheBlock, Ethereum’s network has experienced a notable surge in network fees, reaching levels not seen since May 2022.

The surge is primarily attributed to the growing speculative activity surrounding meme tokens, a trend that has gained momentum recently, fueled in part by Bitcoin’s ascent to new all-time highs. Investors are increasingly drawn to riskier bets, with meme tokens witnessing an average threefold increase in value over the past month.

This heightened speculation has led to Ethereum experiencing its highest fees in nearly two years, surpassing $190 million in fees in the past week alone. This translates to an annualized rate of over $10 billion, a milestone not seen since early 2022.

Moreover, Ethereum’s fee-burn mechanism has resulted in a reduction of approximately 33,000 ETH in supply, equivalent to around $125 million.

While the surge in fees may benefit ETH holders, it has made the network less accessible for many users. The average transaction fee on Ethereum’s mainnet reached $28 in the past week, making certain transactions impractical.

On the Arbitrum Layer-2 (L2) network, average fees have surpassed $1 for the first time since June 2022. However, relief is expected with Ethereum’s upcoming Dencun upgrade, set for March 13, which includes Ethereum Improvement Proposal (EIP) 4844, introducing proto-danksharding. This new transaction type, known as blobs, is anticipated to significantly reduce data availability costs for L2s.

Market forecasts suggest that major L2s could witness fee reductions of at least 80% following the Dencun upgrade. Additionally, OP stack chains will receive upgrades the day after, incorporating data blob functionality.

Estimates indicate that fees for depositing USDC on platforms like Aave could plummet to as low as $0.0091, marking a notable 27-fold decrease. According to Polymarket, the reduction in costs for L2s could be even more substantial, potentially dropping to 60 times lower than current levels.

While there’s some uncertainty regarding the exact magnitude of fee reductions resulting from the Dencun upgrade, it’s evident that gas costs associated with meme token frenzies are likely to see a significant decline in L2s soon.

This development bodes well for Ethereum’s scalability and usability, paving the way for a more efficient and accessible blockchain ecosystem.