Ethereum’s Layer-1 revenue drops 99% in six months.
The Dencun upgrade and rising Layer-2 usage have shifted activity away from Ethereum’s mainnet.
Concerns arise over Ethereum’s sustainability.
Ethereum’s Layer-1 network has seen its revenue drop by a staggering 99% over the past six months. Data from Token Terminal reveals that the network’s revenue peaked at $35 million on March 5. However, following the Dencun upgrade, daily revenue started to fall, reaching a yearly low of $200,000 by September 2.
This decline is tied to the growth of Ethereum’s Layer-2 (L2) solutions and the effects of the Dencun upgrade. The upgrade reduced fees for L2 transactions, altering Ethereum’s revenue structure.
Post-upgrade, transaction activity shifted from Ethereum’s mainnet to L2 platforms, leading to more daily transactions and active users on these L2s. This migration has negatively affected Ethereum’s fee revenue.
Furthermore, changes to the network’s fee structure may have played a role in the revenue drop. ETH’s burn rate initially increased with the introduction of higher gas fees, making the token deflationary through increased scarcity. However, the…
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