Uniswap UNI Token FOMO Brings Ethereum Fees To Nearly $1M An Hour

Tony "The Bull" Severino

1 year ago

3 mins read

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Last week, Uniswap launched its UNI token and set the crypto market ablaze with renewed interest in the DeFi project. The 400 free tokens essentially acted as a stimulus check, and as investors rushed to cash their “checks,” it brought Ethereum fees sky-high to a record nearly $1 million in a single hour.

What does this mean for Ethereum, and what does it say about the demand for Uniswap’s new DeFi coin?

UNI FOMO Drives ETH Gas Fees To Record One-Hour Highs

The DeFi trend has brought about flashbacks of the crypto hype bubble, where new projects were minted by the day and untold wealth was generated.

Two platforms central to this trend, Ethereum, which most projects are built on, and Uniswap, the platform where these tokens make their debut, have been topping charts recently.

Last week’s surprise introduction of the UNI token by liquidity pooling platform Uniswap caused Ethereum prices to surge as users bought up ETH to spend on gas fees to access the free tokens and cash them in. Those who paid the least were forced to wait up to as long as ten hours for transactions to complete, unless they forked over costly ETH fees.

UNI tokens were almost instantly worth nearly $3, and those who sold the DeFi tokens secured a stimulus check-comparative amount of free funds. Uniswap’s new coin eventually grew 150% due to the enormous interest in the token.

UNIUSD 150% 24 Rise Causes Ethereum Gas Fees To Skyrocket | Source: TradingView

Will Ethereum 2.0 Withstand The Next Uniswap Scenario?

Prices were surging even as those who just got their free tokens were selling them off. During the madness Ethereum also started to rally, driven by crypto investors buying ETH to fund expensive gas fees to claim their UNI tokens.

The frenzy also led to Ethereum breaking a record for the highest level of transaction fees within a single hour ever. The hourly total exceeded $900,000 according to Arcane Research.

The DeFi trend has put a spotlight on rising Ethereum gas fees. Users claim to have been deterred from transaction on the Ethereum blockchain as a result of the high fees.

Others compare Ethereum to the hottest night club in town, demanding high fees in order to get in. This night club, just saw its highest hourly demand ever, totalling just under $1 million in fees in 60 minutes.

Although the demand for UNI was a perfect storm of free money, FOMO, and a flashy new token from the hottest platform around, the sudden rise in demand was enough to cost Ethereum users a small fortune.

And with the way the DeFi movement is developing, this won’t be the last time Ethereum fees break such records, unless developers can finally introduce ETH 2.0 and take the platform by the horns.

Featured image from DepositPhotos, Charts from TradingView and Glassnode

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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