Transaction Fees On Ethereum Have Skyrocketed To The Highest Level Since May 2022. AVAX, JOE and CAKE Could Reap The Benefit From Ethereum High Gas Fees.

Daily Median Gas Price (dune.com)

Average transaction fees on Ethereum have risen to the highest level since May 2022 as network activity increased. The Highest fees on Ethereum network was 87 gwei on May 2. Gas fees on Ethereum have been increasing because the growth in market share of meme coins especially PEPE.

Ethereum gas fees is expensive because currently Ethereum can process about 29 tps. With layer 2 scaling solution such as Polygon, Arbitrum, and Optimism that can help reduce Ethereum gas fees. However, gas fees on layer 2 are more expensive than gas fees on Avalanche, Polkadot, and Near Protocol.

The future of blockchain is multichain because if Ethereum gas fees both mainnet and layer 2 continue to be expensive. Whereas, other blockchains can provide very cheap transactions fees, people will use other blockchains apart from Ethereum.

Blockchains that can benefit from Ethereum high gas fees are BNB Chain and AVAX. The first reason is that both BNB Chain and Avalanche are EVM compatible, making it easy for people to migrate from Ethereum to BNB Chain and Avalanche.

Second reason is that BNB and Avalanche already have strong DeFi platforms to support the migration from Ethereum. PancakeSwap is the largest DeFi platform on BNB Chain, currently it has 2.11 billion TVL. TraderJoe is the largest DeFi platform on Avalanche with $107 million TVL.

Popular DeFi platforms

1. Uniswap (Ethereum)

2. AAVE (Mainly Ethereum but also support Avalanche)

3. Curve (Mainly Ethereum but also support Avalanche)

4. PancakeSwap (BNB Chain)

5. TraderJoe (Avalanche)     

Smart Contract Blockchains by Market Cap

1. Polygon $9.1 billion

2. Solana $8.6 billion

3. Polkadot $6.7 billion

4. Tron $6.3 billion

5. Avalanche $5.6 billion

6. Cosmos $3.1 billion

(As of May 5, 2023.)

DeFi Tokens by Market Cap

1. Uniswap $3.0 billion

2. Aave $1.0 billion

3. Curve $759 million

4. PancakeSwap $493 million

5. TraderJoe $138 million

On May 5, token swap on Metamask can cost $33 per transaction. If Ethereum gas fees continue to be this expensive. A lot of people will divert some of their money to invest in DeFi in other blockchains.

AVAX, CAKE, and Joe tokens can reap the benefit from high Ethereum gas fees because looking from statistics Avalanche, PancakeSwap, and TraderJoe have the potential to grow. Furthermore AVAX, CAKE, and JOE tokens are not at high prices.