Ethereum's revenue drop in August triggers community discussion despite a price increase, highlighting differing views on valuation metrics and future prospects.

Executive Summary

A significant decline in Ethereum's revenue has ignited debate within the crypto community, despite a concurrent price surge. August revenue totaled $39.2 million, a 75% year-over-year (YoY) decrease compared to 2023. This revenue dip contrasts with a 73% price increase since Q3 2025. The core debate centers on whether revenue is a critical metric for assessing the health of the Ethereum network.

The Event in Detail

The drop in Ethereum's revenue is primarily attributed to the Dencun upgrade, which shifted transaction fees to Layer-2 (L2) solutions such as Base and Arbitrum. Post-Dencun upgrade, Ethereum's revenue plummeted from $544.37 million in March to $1.80 million in September, marking a 99.7% decrease. The introduction of blobs streamlined data transfer from L2 to the main chain, sharply decreasing storage costs for L2 rollup users. According to Messari, the network's revenue in August was $39.2 million, a 75% drop compared to the same month in 2023 and a 30% decline from August 2024, marking the lowest revenue since January 2021.

Market Implications

The revenue decline has led to contrasting interpretations. Some analysts argue that decreased revenue signals collapsing fundamentals, while others suggest lower fees encourage wider adoption and ecosystem growth. Ethereum's structural supply dynamics have been reshaped by the EIP-1559 upgrade, introducing permanent token burns to reduce circulating supply. Net emissions are now near neutral, creating a deflationary environment. Data from Glassnode indicates that Ethereum's exchange flux balance turned negative in September 2025, signaling aggressive accumulation by long-term holders, with exchange balances plummeting to their lowest levels in nine years.

Expert Commentary

Henrik Andersson, chief investment officer of Apollo Crypto, stated that Ethereum is becoming the neutral decentralized base layer for finance. He argues that, similar to Bitcoin, Ethereum should not be valued solely on revenue but as a store of value. AJC, a researcher at Messari, stated, “Ethereum's fundamentals are collapsing,” due to the revenue decline. However, this view is contested by those pointing to rising metrics, app revenue, and stablecoin supply.

Broader Context

Ethereum's gas fees have decreased from an average of $5.90 in March 2024 to $3.78 in Q3 2025. The implementation of EIP-4844 reduced rollup fees by over 50%, optimizing data availability. As fees drop, transaction volumes on L2s rise, exemplified by Base's daily revenue surging to $185,291 in 2025. Centralization of sequencers in L2 ecosystems remains a concern, potentially undermining decentralization. However, upgrades such as ZK proofs and shared sequencing layers aim to restore decentralization.

Institutional adoption of Ethereum ETFs has driven over $12 billion in inflows by August 2025. Currently, 29% of ETH supply is staked, offering 4-6% annualized yields. Ethereum dominates 95% of stablecoin volume and 82% of tokenized assets. Daily transactions on Ethereum average 1.65 million as of Q1 2025, with smart contract interactions accounting for 62% of daily transactions.