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<p class="is-style-lead">Ethereum (ETH) on-chain activity reached new highs this year as mainnet transaction fees dropped by over 90%.</p> 
<p>Token Terminal data <a href="https://x.com/tokenterminal/status/1830602860352172072" target="_blank">showed</a> that Ethereum (<a href="https://crypto.news/price/ethereum/" target="_blank">ETH</a>) revenue has fallen by 99% since March, reaching one of the lowest levels in the blockchain’s history. This revenue is generated by fees for executing transactions on Ethereum’s main blockchain.</p> 
<p>Simultaneously, ETH on-chain swaps soared to new all-time highs this year, according to L2Beat analytics. Syncracy Capital co-founder Ryan Watkins described these developments as bullish for Ethereum’s chain and decentralized finance.</p> 
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   <p lang="en" dir="ltr">Ethereum onchain activity reaching new highs while fees are down 90% is bullish, not bearish.<br><br>The faster fees per txn trend towards zero the better.<br><br>The North Star is to onboard billions of people globally to cryptoeconomy with ETH as the programmable money at the center of it. <a rel="" href="https://t.co/J0FGmle5VL" target="_blank">https://t.co/J0FGmle5VL</a> <a rel="" href="https://t.co/ROPGz0hYkT" target="_blank">pic.twitter.com/ROPGz0hYkT</a></p>— Ryan Watkins (@RyanWatkins_) <a href="https://twitter.com/RyanWatkins_/status/1830746513053561053?ref_src=twsrc%5Etfw" target="_blank">September 2, 2024</a>
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<p> You might also like: <a rel="" href="https://crypto.news/layer-2-solutions-surge-after-dencun-upgrade-is-it-safe-for-the-system/"> Layer-2 solutions surge after Dencun upgrade. Is it safe for the system? </a> </p> 
<h2 class="wp-block-heading" id="why-are-ethereum-l1-fees-down-but-activity-up">Why are Ethereum L1 fees down but activity up?</h2> 
<p>Fees on Ethereum’s mainnet began declining after the <a rel="" href="https://crypto.news/layer-2-solutions-surge-after-dencun-upgrade-is-it-safe-for-the-system/">implementation</a> of the Dencun upgrade in March. Dencun introduced blobs and proto-danksharding technology to Ethereum’s ecosystem, allowing layer-2 networks to process more data and transactions.</p> 
<p>The update enhanced L2 utility while also decongesting Ethereum’s main layer. As a result, sending transactions across Ethereum and its L2 networks became cheaper, leading to reduced revenue on Ethereum’s mainnet.</p> 
<p>However, cheaper fees incentivized users to tap the second-largest blockchain after Bitcoin (<a href="https://crypto.news/price/bitcoin/" target="_blank">BTC</a>) more than ever.&nbsp;Before Dencun, high gas fees were a common pain point for regular ETH users, and increased activity, such as airdrops or token claims, often made the chain nearly unusable.</p> 
<p>The drop in revenue and the rise in on-chain transactions also coincided with Ether capturing Wall Street’s attention.</p> 
<p>After spot Bitcoin exchange-traded funds (ETFs) debuted in January, similar funds underpinned by ETH were approved by the U.S. Securities and Exchange Commission in July. At the end of August, investors had <a href="https://crypto.news/heres-why-ethereum-etf-inflows-are-lagging-behind-bitcoin/" target="_blank">traded</a> over $2 billion worth of spot Ether ETFs.</p> 
<p>The long-term impact on spot ETH ETFs remains to be seen, and debates on whether the development aligned with Ethereum’s ethos <a rel="" href="https://crypto.news/experts-spot-ether-etfs-not-the-boon-industry-thinks/">continued</a>.</p> 
<p> Read more: <a rel="" href="https://crypto.news/heres-why-ethereum-etf-inflows-are-lagging-behind-bitcoin/"> Here’s why Ethereum ETF inflows are lagging behind Bitcoin </a> </p>

Ethereum activity hit ATHs as fees plunge 99%

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