Despite the Dencun update, designed to reduce transaction costs, Ethereum’s earnings from fees grew in 2024, confirming its position at the top among blockchains.
According to the report by CoinGecko published on January 21, Ethereum recorded a 3% year-on-year increase, with total earnings reaching 2.48 billion dollars, consolidating its position as a leader.
The Dencun Effect on Ethereum Fees
The Dencun update, implemented in March 2024, had as its primary objective the reduction of transaction fees, especially for Layer 2 (L2) networks, in an attempt to make Ethereum more scalable and accessible.
However, contrary to expectations of a decrease in revenue, Ethereum has maintained and even increased its gains. According to Lim Yu Qian, analyst at CoinGecko,
“The result demonstrates the resilience of the network, despite the shift of many users from the mainnet (L1) to L2 solutions.”
The gas fee earned by Ethereum not only withstood the impact of Dencun, but were fueled by increasing on-chain activity and events like airdrop programs, which incentivized the use of the network. In the first quarter of 2024 alone, Ethereum collected 1.17 billion dollars, representing nearly half of its annual revenue.
Ethereum excelled in 2024, but other blockchains showed surprising performance. Tron, for example, gained 2.15 billion dollars, with an increase of 116.7% compared to the previous year. Bitcoin, while maintaining the third position, recorded a more contained increase of 16%, with gains of 922 million dollars.
The most striking case was Solana, which saw a skyrocketing increase of 2,838% in fees, rising from 25 million dollars in 2023 to 750 million dollars in 2024. This boom was attributed to the popularity of memecoin, which also led Solana to surpass 100 million active wallets in October.
Ethereum: leadership sotto pressione?
Despite the gains, Ethereum faced a complex year. The price of the ETH token remained below expectations, also influenced by concerns about the potential decline in revenues resulting from the expansion of L2 solutions.
At the same time, internal tensions within the Ethereum Foundation have drawn attention, with co-founder Vitalik Buterin announcing changes in leadership, aiming to strengthen coordination between the foundation and the developer community.
Furthermore, the announcement of the departure of Eric Conner, one of the main developers of Ethereum, highlighted the internal disagreements. Conner criticized Buterin for the lack of greater decentralization in the management of the foundation.
In 2024, the blockchain fees market reached a total of 6.60 billion dollars, of which only 294 million dollars came from Layer 2 networks. This shows that, despite the growing use of scalable solutions, Layer 1 networks continue to dominate in terms of revenue.
Ethereum, despite facing technical and strategic challenges, has consolidated its position as a leader thanks to its ability to attract users and innovation, even in a context of fee reduction.
The future will depend on the network’s ability to balance scalability and decentralization, maintaining the competitive edge in an increasingly dynamic market.
