Avalanche ecosystem users have paid $13.8 million in transaction fees over the past five days to create software-based tokens and process transactions. Software-based tokens are created by writing code for ordinary blockchain transactions and using an external numbering system.
The lack of native token support in the Bitcoin network has led to a temporary solution with software-based approaches, which have quickly spread to many other blockchain ecosystems for various reasons. One of the main reasons for this spread is the ability to transfer software-based tokens more cheaply than native tokens.
This low-cost process remains valid across most blockchain networks. While tens of millions of software-based tokens have been created in leading ecosystems such as Polygon and BNB Chain, users have paid approximately one million dollars in total fees for each chain.
On the Avalanche front, according to a Dune Analytics dashboard created by Hildobby, a researcher at Dragonfly VC, transaction fees spent on software-based tokens have risen to $5.6 million per day in recent days. The total fee of $13.8 million accounted for about 70% of all fees spent across the monitored blockchain ecosystem, drawing attention.
Avalanche has experienced two significant periods of popularity related to software-based tokens. During the first period of popularity, which lasted about five days at the end of November, a total of approximately $1.5 million in transaction fees was collected. However, the fees were significantly higher in the recent period due to the increase in Avax price and high level of popularity.