Cardano Transaction Volume Spikes To Record Numbers, Why?

Paigambar Mohan Raj
Source: Binance Academy

According to Messari data, transaction fees for Cardano (ADA) have significantly increased. Cardano network transaction costs reached a record high of $15.2K on May 28. The amount is at its greatest point since August 11, 2022. The development suggested higher network demand and activity. ADA transaction fees on May 1 were $8.4K, which was a noticeably lower amount.

Despite these figures, ADA maintains that it has the lowest transaction fees when compared to Bitcoin (BTC) and Ethereum (ETH). In stark contrast to Cardano’s (ADA) transaction fee of $15200, Bitcoin reported a total transaction fee of $1.76 million the previous day. With transaction fees totaling $9.16 million, Ethereum (ETH) recorded an even greater fee.

The underlying technology of these platforms is the main cause of the wide disparity in transaction fees. Cardano’s (ADA) ability to process more transactions per second (TPS) lowers the cost of each transaction even further.

Why are Cardano transaction fees surging?

The volume of ADA’s decentralized exchange (DEX) has increased noticeably by 91% over the previous week, increasing to $68.5 million. Increased activity on ADA-based DEX platforms, particularly Minswap, which accounted for 90.4% of the entire DEX volume, is the primary reason for the rise in transaction costs.

According to data from Minswap, volumes increased dramatically from just over $1 million at the beginning of May to $18 million on Tuesday. By locked value, Minswap is the largest ADA application. The platform controls 37% of the network’s total token holdings, which total more than $175 million.

Such behavior can raise the value of Minswap’s MIN tokens, which are used as a governance token and gain value from platform usage. SNEK and BANK, two ADA-based meme coins, contributed significantly to the increasing volumes. The two tokens’ prices increased by as much as 34% on the previous day. Moreover, $40 million worth of transactions took place on Minswap alone. At press time, ADA was trading at $0.383119, up by 1.2% in the last 24 hours.