This Crypto Project Has Caused an Increase in Transaction Fees on the Ethereum Network

• Transaction fees generated by the Ethereum (ETH) blockchain have increased by 57.8% between July 3rd and the time of writing.
• This project is said to serve as a bridge liquidity token between the Bitcoin and Ethereum blockchains.
• Obtaining the largest share of burned ETH could invalidate major contributors to this project such as Uniswap and Arbitrum.

A crypto project launched on the ERC-20 and BRC-20 protocols has led to an increase in transaction fees on the Ethereum network.

Transaction Fees on Ethereum Increased by 57%

Transaction fees generated by the Ethereum (ETH) blockchain have increased by 57.8% between July 3rd and the time of writing. According to the latest data, Ethereum, the second-largest blockchain, earned $47 million during the specified period.

When Ethereum fees increase, it indicates that the network experiences high volatility and high traffic. It also means that transaction fees are consumed due to the continuous execution of smart contracts. The reason for this is usually the complexity of certain smart contracts and the need for extensive computation. However, the primary reason behind this demand in ETH-related transactions was quite surprising.

According to the data, VMPX appears to contribute 18% to these fees. VMPX is a new crypto currency that operates as an ERC-20 and BRC-20 token. VMPX claims to serve as a bridge liquidity token between the Bitcoin and Ethereum blockchains. The project states:

“The ultimate purpose of the VMPX token is to facilitate seamless swap transactions between BRC-20 and ERC-20 tokens on the Bitcoin-Ethereum bridge. Additionally, VMPX token holders can convert their tokens into the XN native currency on the X1 blockchain using a smart contract.”

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Obtaining the largest share of burned ETH could invalidate major contributors to this project such as Uniswap and Arbitrum. On July 6th, project founder Jack Levin shared that VMPX had conducted a fee-generating activity, which reportedly generated $7 million with 4,500 participants.

Decrease in Network Congestion

Santiment showed that Wrapped Ethereum had the highest share in terms of distribution. This was not surprising, especially considering that VMPX requires a WETH swap to process transactions.

However, the increase in ETH fees slowed down by July 5th. At the time of writing, burned fees on ETH amounted to $682,000. This indicates a decrease in network congestion on the Ethereum network. Additionally, this decline shows that the initial surge in demand is no longer present.