Ethereum’s Layer 1 (L1) network generated over $100,000 in fees from direct transfers in the last 24 hours.
Most transaction fees in the ecosystem were linked to decentralized applications, with revenues retained by their respective teams.
Data from DeFi Llama shows Ethereum now ranks alongside smaller blockchain networks in fee generation. However, the fee decline signals that Ethereum has successfully reduced gas costs, making transactions more affordable. Gas prices dropped below one gwei, with regular transfers costing as little as $0.02 and decentralized exchange (DEX) swaps as low as $0.28.
The decline in fees coincides with ETH’s recent price fluctuations. After briefly trading under $2,000, ETH rebounded to $2,069.51 on March 24. Despite increased trading activity, large holders have profited during short-term price movements. ETH also recovered to 0.024 BTC, reflecting improved market conditions.
Ethereum sees declining on-chain activity
Ethereum’s network previously had high transaction costs, with swap fees reaching $28 or more. Recently, activity has slowed, leading to a cycle of lower demand and reduced gas prices. The network has about 1.8 million weekly active users, a noticeable decline since February.
Fewer transactions have contributed to lower fees, affecting validator earnings. While Ethereum continues to issue staking rewards, revenue from transaction fees has reached historic lows. The network is now cheaper, but user activity has decreased, partly due to a slowdown in meme coin and AI agent trading.Basic token transfers alone are not driving network usage. No strong trends are attracting new users, while more traffic is shifting to the BNB Smart Chain.
Ethereum inflation rises as burn rate declines
Ethereum’s burn rate has dropped with lower transaction fees, increasing its circulating supply. Reduced token transfers and blob transaction fees have slowed the network’s deflationary trend. Only 10 ETH is burned daily from blob fees, a sharp decline from 80 ETH in February. ETH transfers account for the largest share of burned tokens, averaging 30 ETH daily.
The network adds approximately 17,000 ETH weekly through validator rewards, leading to an annualized inflation rate of 0.72%. Ethereum’s total supply could grow by nearly 1 million ETH this year if these trends continue. The current mint and burn balance has already resulted in an additional 600,000 ETH entering circulation.
Layer 2 networks benefit from low gas fees
One of the main reasons for Ethereum’s declining revenues is the minimal cost of Layer 2 (L2) operations. In recent days, all major L2 networks have paid zero blob fees, enabling near-free transactions. Even highly active platforms like Base and Arbitrum have not contributed to Ethereum’s L1 revenue, although their user bases have remained stable.
Lower gas costs have also revived on-chain minting activity. The Lightchain Protocol AI became the top smart contract, consuming 10.34% of Ethereum’s total gas. BC.Game, a popular Ethereum-based casino, ranked second, burning around 6% of all gas. These contracts have temporarily surpassed Tether (USDT) in network activity. However, if gas fees return to previous levels, minting protocols and gaming transactions could decline once again.