Crypto traders are willing to pay high fees to get in early on newly-issued meme coins and get a large percentage of the supply.
On-chain data has shown that a trader paid over 64 ETH in fees on Monday to get 84 ETH worth of FOUR, a newly-issued meme token on the Ethereum blockchain. This means the trader spent over $120,000 to get $156,000 worth of FOUR tokens.
Further data shows that the top early FOUR buyers are sitting on profits ranging from $240,000 to $2 million. FOUR tokens have seen $136 million in trading volumes on the first day of trading and have a market capitalization of $30 million as of Tuesday.
However, the current hot ball of money in crypto is hunting for jokes instead of fundamental plays, leading to outrageously large gas fees on the Ethereum blockchain.
Gas refers to ether paid by Ethereum users to ensure their transactions are included in the earliest block by network validators. These validators prioritize transactions that pay the highest fees, resulting in fees on popular tokens running into thousands of dollars.
The rise of meme coins has been attributed to the current frenzy for jokes, with investors looking for the next big thing in meme coins.
This trend has led to a proliferation of meme coins such as Dogecoin and Shiba Inu, which have gained significant traction and market value.