Ethereum #layer-1 Revenue Collapse: What's Behind the Drop? đ
đ Since the #DENCUN upgrade on March 13, 2024, Ethereum's layer-1 network revenue has plummeted by 99%! Despite a surge in layer-2 (L2) user activity and #transactions âboth doubling since Marchâfees for layer-1 transactions have dramatically dropped from $35.5M to just $578,000. đ
The Dencun upgrade, aimed at reducing layer-2 fees, has led to an explosion of competing L2 solutions. With 74 L2 and 21 layer-3 projects now vying for users, the race to offer the lowest fees has intensified, driving more activity off the Ethereum base layer. đ§
This fierce competition has driven transaction costs down, counteracting the deflationary effects of EIP-1559 and causing a steady increase in $ETH supply. Therefore, Ethereum has ceased to be a deflationary asset, which can negatively affect its price. đ€·
Is the L2 boom causing Ethereumâs base layer to suffer? đ€đ
đ€ #DOGSONBINANCE #TON
