Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • ADOPTION
  • TRADING
  • HACKING
  • SLOT
  • TRADE
Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • ADOPTION
  • TRADING
  • HACKING
  • SLOT
  • TRADE
Crypto Flexs
Home»ETHEREUM NEWS»Ethereum Network Revenues Plummet 99%, ‘Death Spiral’ Concerns Spread
ETHEREUM NEWS

Ethereum Network Revenues Plummet 99%, ‘Death Spiral’ Concerns Spread

By Crypto FlexsSeptember 5, 20242 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Ethereum Network Revenues Plummet 99%, ‘Death Spiral’ Concerns Spread
Share
Facebook Twitter LinkedIn Pinterest Email

Ethereum’s Layer 1 network revenue has been in steep decline, plummeting 99% since March 2024.

According to data from Token Terminal, network revenue peaked at over $35 million on March 5. However, by September 2, daily revenue had plummeted to around $200,000, a yearly low.

Ethereum Profits (Source: Token Terminal)

Market observers attribute the decline to the growth of Layer 2 (L2) networks and the March Dencun upgrade, which reduced L2 transaction fees and restructured Ethereum’s revenue structure. Token Terminal said:

“A key indicator of how lower transaction fees on L2 have driven increased usage, but reduced revenue on L1.”

Since the upgrade, trading activity has shifted from the Ethereum mainnet to the L2 network, which has led to an increase in the platform’s daily trading volume and active users.

However, this migration has had a significant impact on Ethereum’s fee revenue. For example, Coinbase’s L2 network, Base, generated $2.5 million in revenue in August but only paid $11,000 to settle on the mainnet, highlighting the shift in value on Ethereum’s base layer.

Ethereum ProfitsEthereum Profits
L2 network lease paid to Ethereum L1. (Source: GrowthePie)

Crypto analyst Kuhn warned that if this trend continues, L2 networks could dominate and potentially abandon the Ethereum mainnet, especially for consumer applications. He stressed that Ethereum needs to develop valuable use cases on the mainnet or it risks serious valuation problems.

He added:

“Either ETH L1 needs a valuable use case on the mainnet that can’t be sieged, or the L2 usage is so large that you basically need 100,000x the usage on L2 to get the same value you got on the mainnet, which creates a valley in the valuation problem.”

‘Spiral of Death’

Bitcoin investor Fred Krueger echoes these concerns, saying that if Ethereum’s low yields continue, it could face a “death spiral.”

He noted that Ethereum currently generates $200,000 in daily fee revenue, which equates to $73 million annually and is nowhere near enough to sustain a market cap of $300 billion.

Kruger argues that a more realistic valuation could be closer to $3 billion, highlighting the disconnect between Ethereum’s fee revenue model and its market valuation. He said:

“(Ethereum) is not the equivalent of a company that makes $73 million a year in profit, and it’s not the equivalent of a company that makes $73 million a year in revenue. That $73 million is Not enough “It’s about buying back all the inflation that naturally occurs to ETH validators.”

What’s mentioned in this article
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Ethereum Dev Zack Cole starts an initiative for the ‘Tokenless’ project.

July 2, 2025

Checkpoint #4: Berlinterop | Ether Leeum Foundation Blog

June 28, 2025

Crypto Scam Markets thrives again after attempting to clean up Telegram.

June 24, 2025
Add A Comment

Comments are closed.

Recent Posts

Valhalla Goes Today: FLOKI has been developed for 3 years and debuts the play MMORPG.

July 4, 2025

The Open Platform Is First Unicorn In Web3 Ecosystem In Telegram At $1bn Valuation

July 3, 2025

The mindset of Retail Investors

July 3, 2025

Cooking.City Bringing Back Value Redistribution To Solana Fair Launches

July 3, 2025

XRP rebounds are interested in APT miners cloud mining.

July 3, 2025

The market will select US regulatory stable coins more than CBDCS every day of CBDCS every day.

July 3, 2025

Best Crypto PR Agency Packages : What to Look For & Where to Start

July 3, 2025

Looking for an Affordable Crypto PR Agency? Here’s What to Know Before You Spend

July 3, 2025

Crypto PR Packages for Startups: What You Need & How to Choose the Right One

July 3, 2025

Cheap Crypto Press Release: How to Promote Your Project Without Overpaying

July 2, 2025

The Ultimate Guide to Crypto Public Relations Packages

July 2, 2025

Crypto Flexs is a Professional Cryptocurrency News Platform. Here we will provide you only interesting content, which you will like very much. We’re dedicated to providing you the best of Cryptocurrency. We hope you enjoy our Cryptocurrency News as much as we enjoy offering them to you.

Contact Us : Partner(@)Cryptoflexs.com

Top Insights

Valhalla Goes Today: FLOKI has been developed for 3 years and debuts the play MMORPG.

July 4, 2025

The Open Platform Is First Unicorn In Web3 Ecosystem In Telegram At $1bn Valuation

July 3, 2025

The mindset of Retail Investors

July 3, 2025
Most Popular

Avalanche (AVAX) continues to decline amid market uncertainty

April 14, 2024

Cryptocurrency hackers and rug pullers stole $71,021,500 in November, with the BNB chain emerging as the top target.

November 29, 2024

Wintermute Launches OutcomeMarket, a US Election Prediction Token

September 17, 2024
  • Home
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© 2025 Crypto Flexs

Type above and press Enter to search. Press Esc to cancel.