Ethereum (ETH), the world’s second-largest blockchain by market capitalization, has seen its quarterly transaction payment income drop dramatically by roughly 95% from its all-time excessive in This fall 2021.
This decline may be primarily attributed to a lower in Layer 2 contributions, coupled with a major dip in exercise throughout the non-fungible token (NFT) market.
What’s Driving the Drop in Ethereum’s Transaction Payment Income?
Token Terminal highlighted this shift within the newest X (previously Twitter) put up. Primarily based on their estimate, Ethereum’s transaction payment income for Q1 2025 is projected to achieve roughly $217 million.
Ethereum Transaction Payment Income. Supply: X/TokenTerminal
This determine represents a dramatic 95% discount from the all-time excessive of $4.3 billion recorded in This fall 2021. At the moment, Ethereum’s income surged by 1,777% year-over-year, in keeping with Bankless. It climbed from $231.4 million in This fall 2020 to $4.3 billion by the final quarter of 2021.
Furthermore, Ethereum’s DeFi ecosystem noticed vital progress in Whole Worth Locked (TVL), decentralized alternate (DEX) volumes, NFT gross sales, and Layer 2 TVL. Nevertheless, the dynamics have modified since then.
That is evident from Ethereum’s current efficiency. In 2025, month-to-month revenues sharply declined, with January recording $150.8 million and February solely $47.5 million. Assuming the development of declining transaction charges continues, March may additionally see equally low figures.
Moreover, within the fourth quarter of 2024, Ethereum generated solely $551.8 million in transaction payment income, emphasizing the continued downward development.
One of many main contributors to the decline is the shift to Layer 2 options. These have turn into more and more common for his or her capability to course of transactions off-chain whereas deciding on Ethereum’s mainnet.
As well as, the activation of EIP-4844 has considerably decreased the info value of posting to Ethereum’s chain, additional decreasing L2 payment contributions. In accordance with a CoinShares report, this improve has made transactions cheaper however has additionally diminished the income Ethereum’s mainnet collects from L2 exercise.
“Layer 2-related charges, which had been excessive in 2023 and early 2024, have since declined as a consequence of value financial savings launched by EIP-4844,” the CoinShares report learn.
The decline in NFT exercise has additionally performed a major function. This fall 2021 marked the height of the NFT craze, with platforms like OpenSea recording billions of {dollars} in month-to-month buying and selling quantity. Nonetheless, now the curiosity has waned, resulting in a pointy drop in transaction quantity and, consequently, payment income.
ETH Suffers its Worst Quarterly Decline Since 2018
This decline extends past transaction payment income. The worth of Ethereum has adopted the same downward development. After reaching an ATH in November 2021, ETH has dropped considerably, now buying and selling 58.8% beneath that peak.
Even in the course of the election euphoria, when many cryptocurrencies, together with Bitcoin (BTC), noticed new highs, Ethereum didn’t preserve tempo.
“ETH has skilled the sharpest decline in Q1, dropping by -40%, marking its greatest quarterly loss since 2018,” an analyst wrote on X.
Ethereum (ETH) Value Efficiency. Supply: BeInCrypto
Over the previous month alone, ETH has fallen by 25.1%. As of press time, the altcoin was buying and selling at $1,997, representing a slight achieve of 0.45% over the previous day.
