Crypto Trader Strikes Profitable Deal Despite Paying $120,000 Ethereum Gas Fee

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A trader has apparently paid nearly $120,000 for a single transaction on the Ethereum ($ETH) network as gas fees rise and memecoin trading continues to grow on the network’s decentralized exchanges.

The Ethereum network is no stranger to high gas fees, but such cases have become increasingly rare since the switch from Proof-of-Work (PoW) protocol to Proof-of-Stake (PoS) consensus algorithm. .

According to available blockchain data, the average Ethereum transaction fee was around $1.9 at the start of the year and steadily increased to $4 in February. At the time of writing, the average transaction fee is 0.012 ETH, or around $22.

The resurgence of high gas fees can be attributed to a rise in meme coin hype, which sparked heavy activity on the network and clogged the system over the weekend. This hype has seen trading volumes on decentralized exchanges increase, leading to increased activity of maximum extractable value (MEV) bots.

An MEV bot is designed to maximize the amount of value that can be extracted from each block on the Ethereum network by influencing its content or order. These bots can, for example, take advantage of decentralized exchange arbitrage opportunities or execute sandwich attacks.

A sandwich attack sees the bot execute two trades around another user’s to manipulate the price of an asset the user is trying to trade and profit from the price difference.

Amid the trading frenzy, one traded person apparently paid nearly $120,000 to have their transaction included in an Ethereum block, paying a total of 64 ETH in fees.

The transaction fee was paid because the trader was buying an altcoin called FOUR. The investor spent the 64 ETH to rush the trade, acquiring 84 ETH of the cryptocurrency. In total, the trade brought them a profit of over $580,000 as they caught the cryptocurrency as soon as it started trading.

Data from blockchain portfolio management tool Zerion shows that the trader rushed in with a buy and then sold part of his position for a profit over a set of trades.

The traders’ wallet currently holds a number of little-known digital assets, along with over 100 ETH that they are apparently ready to deploy to newly minted cryptocurrencies in a bid to make a profit.

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