Ethereum’s base-layer transaction fees have plummeted to their lowest levels of the year, while the capital locked across the ecosystem continues to hold steady. Recent insights reveal a continuous drop in fee revenue, pointing to a fundamental change in how users engage with the network, rather than a downturn in overall usage. The 90-day moving average of total transaction fees has experienced a consistent decline since the beginning of 2025. In the past, lower fees indicated a decline in demand for blockspace, but the current cycle presents a different scenario: Ethereum’s total value locked and ecosystem capital remain stable, implying that users are still engaged but are conducting transactions in alternative venues. According to data, Ethereum fees have been on a downward trajectory following a significant decline observed between January and May 2025, plummeting from over 1,800 to approximately 389 ETH. At the time of this report, the fee stood at approximately 289 ETH.
The decline has persisted following Ethereum’s Fusaka upgrade, which enhanced data capacity and boosted throughput. The recent developments facilitate rollups and Layer-2 networks in settling activities with greater efficiency, thereby diminishing the reliance on costly mainnet transactions. Recent technical developments, such as EIP-1559 and enhancements following the Merge, have steered Ethereum towards a framework where daily operations occur on Layer 2 solutions, while the base layer functions as a secure settlement environment. Chain revenue and application revenue have shown a downward trend during this timeframe.
This underscores the notion that value is disseminating across various execution layers instead of vanishing from Ethereum entirely. The network continues to handle activity via more cost-effective layers, maintaining its user base. At the time of this report, chain revenue stood at $8.5 million, while app revenue reached $6.6 million. The current TVL stands at over $70.5 billion, reinforcing this perspective. Despite the ups and downs in ETH price, liquidity within smart contracts has shown remarkable resilience, signaling ongoing demand for DeFi services and staking, even as fees experience a decline.
ETH has seen a correction from its recent peaks, yet the drop in fees seems to be more associated with structural changes rather than a decrease in interest. As of the latest update, it was trading at approximately $3,127. If Layer-2 adoption persists and further upgrades enhance capacity, Ethereum’s base-layer fee revenue could stabilize at a lower range, without indicating any deterioration in network fundamentals.