Basri Caneri 
Daily transaction fees on the Ethereum network fell below the $1 million mark for the first time since September 2024. According to Token Terminal data, on February 8, daily revenue from Ethereum transaction fees fell to $731,000. This is only the second time this has happened since November 2020.
Ethereum Revenues Fall Sharply
Revenue from transaction fees on the Ethereum network also fell below $1 million several times between August 2024 and September 2024. This time, however, several critical factors are behind the decline:
- The proliferation of Layer-2 solutions: While transaction intensity on Ethereum is decreasing, Layer-2 networks such as Optimism, Arbitrum and zkSync are taking on more transaction load.
- Increase in Ethereum supply: Ethereum supply, which became deflationary with the Merge update in 2022, has been on the rise again since April 2024. According to Ultrassound.money data, Ethereum supply is back to pre-Merge levels.
- The rise of competing networks: Networks such as Solana, Tron and BNB Chain are attracting user interest because they offer lower transaction fees.
Ethereum’s Market Performance and Future Prospects
The drop in Ethereum’s transaction fees has been reflected in its market capitalization. Compared to Bitcoin’s rise, the ETH price has lagged behind in making new highs. The approval of spot Ethereum ETFs in the US and Hong Kong also failed to provide the expected price momentum.
On the other hand, Ethereum investors remain optimistic in the long term. According to CryptoQuant data, there were large-scale outflows from exchanges on February 7, with a total of 330,705 ETH (about $833 million) transferred to long-term wallets.
What’s Next for Ethereum?
Developments in the Ethereum ecosystem present a complex picture for the future of the network. While lower transaction fees are a positive development for users, reduced activity on the Ethereum network could raise questions about decentralization and security.
In contrast, Ethereum’s Layer-2 integrations and strength in the DeFi sector suggest that the network could maintain its competitive advantage in the long term. However, the increasing adoption rate of competitors such as Solana and Tron could continue to threaten Ethereum’s dominant position.
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