Ethereum

Solana

Avalanche

Ethereum, Solana, and Avalanche are processing more transactions than they were a year ago, yet their native tokens—<a href="https://coinmarketcap.com/currencies/ethereum/" rel="noopener noreferrer nofollow">ETH</a>, <a href="https://coinmarketcap.com/currencies/solana/" rel="noopener noreferrer nofollow">SOL</a> and <a href="https://coinmarketcap.com/currencies/avalanche/" rel="noopener noreferrer nofollow">AVAX</a>—are down roughly 50% or more over the same period.In a sense, these tokens are victims of their networks’ success. Cheaper transactions are driving usage higher. At the same time, lower fees are reducing the value accruing to native tokens.“If demand fails to expand fast enough to offset cheaper transactions, the network ends up busier and less profitable at the same time,” CoinShares analyst Luke Nolan <a href="https://coinshares.com/us/insights/research-data/ethereum-5-year-valuation-framework/" rel="noopener noreferrer nofollow">wrote</a> in May.The question is whether token prices will catch up with network fundamentals or whether this decoupling is the new normal.<h2 id="more-transactions-less-revenue">More Transactions, Less Revenue</h2>Judged by transaction volumes alone, Ethereum, Solana, and Avalanche are thriving. However, network revenue tells a more complicated story.Ethereum processed 203.9 million transactions in the second quarter, up 68% from a year earlier, <a href="https://finance.yahoo.com/markets/crypto/articles/ethereum-falling-fees-not-mean-075605281.html" rel="noopener noreferrer nofollow">according</a> to Bitwise. The average transaction cost fell 71% to $0.31, while network revenue declined 51% to $64 million.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/44dc130a37034fdbace5cd68d0c0d66c.png">Ethereum’s daily transaction fees are currently far below 2024 levels. Source: <a href="https://coinshares.com/us/insights/research-data/ethereum-5-year-valuation-framework/" rel="noopener noreferrer nofollow">CoinShares</a>Solana tells a similar story. It <a href="https://www.thestreet.com/crypto/markets/solanas-tokenized-asset-volume-hits-5-8-billion-in-a-record-quarter" rel="noopener noreferrer nofollow">processed</a> 9.8 billion non-vote transactions in the second quarter, up 10% from a year earlier. Meanwhile, the network’s average transaction cost fell 83%, while revenue dropped 81% to $51 million.Avalanche’s C-Chain <a href="https://nansen.ai/post/avalanche-q2-2026-report" rel="noopener noreferrer nofollow">processed</a> 235.6 million transactions in Q2, more than four times the year-earlier total. The average cost fell nearly 95% to $0.0014, while revenue declined 79% to about $330,000.According to Bitwise, the main reason for the revenue declines is simple: protocol upgrades are making blockspace cheaper and more abundant.“What we’re seeing onchain is, first, that blockchains are becoming cheaper, and second, onchain activity is actually increasing,” Bitwise head of on-chain research Kam Benbrik <a href="https://www.theblock.co/post/409799/ethereum-solana-avalanche-get-busier-cheaper-even-as-token-prices-fall-bitwise" rel="noopener noreferrer nofollow">told</a> The Block.<h2 id="network-growth-does-not-guarantee-token-demand">Network Growth Does Not Guarantee Token Demand</h2>The widening economic disconnect has been especially noticeable on Ethereum. The network’s shift toward layer-2 networks weakened the link between activity and ETH demand. Rollups can now process more transactions while paying lower fees to the base layer, reducing revenue and token burning.Solana faces similar challenges. The network’s application layer generated $342.2 million in first-quarter revenue, <a href="https://messari.io/report/state-of-solana-q1-2026" rel="noopener noreferrer nofollow">according</a> to Messari, but much of that income flowed to developers, trading platforms, and validators rather than SOL holders.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/0063248fdd354144bf4138c8ba87a34a.jpg">Avalanche C-chain transactions increased roughly fourfold year-over-year, but AVAX continues to bleed. Source: CoinMarketCapAvalanche’s tokenomics are especially complex. Its custom layer-1 networks can use separate tokens for transaction fees. Validators pay AVAX to the primary network, but the resulting revenue has been limited.In July, the Avalanche Foundation said it was studying fees, Maximal Extractable Value (MEV), and revenue-sharing mechanisms to strengthen AVAX’s tokenomics.“The connection between ecosystem output and AVAX value accrual is the central problem we are working on,” Matias Antonio, the Avalanche Foundation’s chief investment officer, <a href="https://www.avax.network/about/blog/the-avalanche-foundation-unveils-its-economic-research-agenda" rel="noopener noreferrer nofollow">said</a> in July.<h2 id="what-metrics-should-traders-watch">What Metrics Should Traders Watch?</h2>Transaction counts show whether a blockchain is active, but they are a weak standalone price signal.“Lower transaction costs typically coincide with higher levels of economically irrelevant transactions,” Fidelity Digital Assets researchers <a href="https://fidelitydigitalassets.com/sites/g/files/djuvja3256/files/dam/gvvlt4ghkx/fda_signalsreport_q22026_1258238.1.0_v2.pdf" rel="noopener noreferrer nofollow">wrote</a>.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/083962c0bff1422491a816a994b681bd.png">Despite tokenomics headwinds, ETH has significantly outperformed BTC and SOL this year. Source: <a href="https://fidelitydigitalassets.com/sites/g/files/djuvja3256/files/dam/gvvlt4ghkx/fda_signalsreport_q22026_1258238.1.0_v2.pdf" rel="noopener noreferrer nofollow">Fidelity Digital Assets</a>More useful measures include fee revenue in the native token, net issuance after burns, the share of staking rewards funded by user fees, and the amount of ETH, SOL, or AVAX held as collateral.Staking rewards funded mainly by issuance dilute non-stakers. Rewards funded by fees provide stronger evidence of economic demand.<h2 id="can-usage-eventually-lift-prices">Can Usage Eventually Lift Prices?</h2>Cheaper blockspace can lift revenue if the lower costs generate enough new demand. CoinShares said Ethereum’s cash-flow bull case depends on that outcome.Otherwise, applications, layer-2s, and custom networks may retain most of the revenue. Native tokens would then rely on collateral demand, staking, and fee-sharing mechanisms.For network tokens such as SOL, “price will ultimately reflect not raw network performance, but the quality, durability, and value capture of that performance,” 21Shares analysts <a href="https://www.21shares.com/en-us/insights/solana-2026-outlook-scale-is-proven-value-capture-is-not" rel="noopener noreferrer nofollow">wrote</a>.

Ethereum, Solana, Avalanche Are Booming, so Why Are Prices Down 50%?

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