Cardano (ADA) has witnessed a significant surge in transaction fees, according to data from Messari. On May 28, the transaction costs on the Cardano network reached a record-breaking high of $15.2K. This figure represents the highest point since August 11, 2022, indicating a notable increase in network demand and activity. It’s worth noting that transaction fees for ADA on May 1 were considerably lower at $8.4K.
Despite the notable increase in transaction fees, Cardano (ADA) asserts that it still maintains the lowest transaction fees when compared to Bitcoin (BTC) and Ethereum (ETH). In stark contrast to Cardano’s transaction fee of $15,200, Bitcoin reported a total transaction fee of $1.76 million on the previous day. Ethereum (ETH) surpassed even higher fees, recording a total of $9.16 million in transaction fees.
The underlying technology of these platforms plays a crucial role in the significant disparity in transaction fees. Cardano’s (ADA) ability to process a higher number of transactions per second (TPS) contributes to lowering the cost of each individual transaction even further.
Understanding the Reasons Behind the Surge in Cardano Transaction Fees
Over the past week, the volume of transactions on Cardano’s decentralized exchange (DEX) has experienced a significant uptick of 91%, reaching a total of $68.5 million. The primary reason behind the rise in transaction fees can be attributed to heightened activity on ADA-based DEX platforms, with Minswap leading the way by accounting for 90.4% of the overall DEX volume.
Data from Minswap reveals a remarkable increase in volumes, starting from just over $1 million at the beginning of May and surging to $18 million on Tuesday. In terms of locked value, Minswap stands as the largest ADA application, with control over 37% of the network’s total token holdings, amounting to more than $175 million.
This surge in activity has the potential to impact the value of Minswap’s MIN tokens, which serve as governance tokens and derive value from platform usage. Notably, the significant increase in volumes can be attributed to the contributions of two ADA-based meme coins, SNEK and BANK, which experienced price hikes of up to 34% on the previous day. Additionally, Minswap facilitated transactions worth $40 million alone.
At the time of writing, ADA was trading at $0.3755, reflecting a 1.2% increase in the last 24 hours.