ethereum is under pressure at spot rates. As of September 12, the second most valuable coin was struggling to gain momentum and stalled below $2,400. The daily chart shows that eth is selling off steadily and the zone between $2,400 and $2,800 is proving to be a strong liquidation region.
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ethereum revenue drops to May 2020 levels
Beyond the price action, something is going on. According to observers, not only is the price of eth plummeting, but there is also a noticeable decline in revenue accompanying the sell-off. At the time of writing, daily revenue generated by the smart contract platform is at May 2020 levels.
To clarify, “revenue” refers to fees paid to validators every time they approve a transaction or execute smart contracts on the chain. While this is a concern, some analysts are optimistic. saying The future of ethereum, despite revenue challenges, is bright.
This confidence stems from several developments. The first of these is the insistence that gas fees on ethereum have come down and are not as bad as many think. Over the years, there have been several implementations to make transactions on the mainnet cheaper.
Following congestion during the last bull run from 2020 to 2021 that pushed gas fees to all-time highs, ethereum developers pushed for layer 2 solutions. Platforms like Arbitrum, OP Mainnet, and Base now have billions in total value locked (TVL), which is seen in L2Beat Dataand gain the trust of users.
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Most importantly, even though these solutions route transactions off-chain, there have been no major attacks that discourage participation and call into question their security.
Due to its popularity, major tech companies and cryptocurrency exchanges like Sony and Coinbase have been active. Coinbase already supports Base, while Sony plans to launch a layer 2, Soneium.
The success of continuous scalability, building and improvement
ethereum’s rapid adoption of layer-2 solutions to reduce the load on the base layer could explain the reduction in fees. Additionally, the Dencun upgrade further reduced layer-2 gas fees, making these platforms even cheaper.
It is this success that ethereum has had in scalability that has observers thinking that the future of the platform is bright. Before layer 2, ethereum struggled to retain users as most could not afford the high gas fees, forcing them to turn to alternatives such as Solana, Tron, and Avalanche.
As a measure of success, meme coin activity on ethereum remains decent even as it slows on Solana and moves to Tron. According to CoingeckoSome of the most valuable meme coins, Pepe and Floki, reside on ethereum, while others, such as Brett, are on Base, part of the network's ecosystem.
The platform is also under development. After the transition to proof-of-stake following The Merge, the immediate goal is to scale on-chain.
ethereum co-founder Vitalik Buterin said this will be achieved in phases, from Purge to Splurge. By the end, the platform will have implemented Sharding, allowing it to process millions of transactions every second without off-chain methods.
