Ethereum’s L1 revenue from transfers falls to $100K in the past 24 hours

Ethereum (ETH) as an L1 protocol produced only a little over $100K in fees from direct transactions. Most of the other fees in the ecosystem were linked to apps and retained by the teams. 

According to data by DeFi Llama, the Ethereum chain now ranks among several smaller protocols in terms of fee production. On the flip side, the lower fee signals that Ethereum has achieved its goal of lowering gas prices, making regular transactions relatively inexpensive.

The latest results follow a recent low for Ethereum gas prices, once again dropping under 1 gWei. Regular transactions now go as low as $0.02, while a DEX swap is as low as $0.28. 

The low fee period comes as ETH traded under $2,000. As of March 24, ETH recovered to $2,069.51. The token is actively traded, with whales taking profits during short-term rallies. ETH also bounced off its lows, moving to 0.024 BTC. 

Previously, Ethereum’s activity remained relatively expensive, with swaps as high as $28 and even higher fees for NFT sales or other on-chain operations. In the past few weeks, Eth has been on a self-enforcing spiral, which has led to lower usage and lower fees. 

The network carries around 1.8M weekly active users, with an outflow of activity since February. 

The lowered turnover of ETH and tokens also contributes to the lower fees. The Eth ecosystem still pays out its validators via new mints, but the expectation of earnings from fees is at an all-time low. Ethereum is finally cheaper to use, but users have flowed out after the slowdown in the meme and AI agent markets. 

Simple token transfers are not enough to drive Ethereum usage. Currently, there are no strong trends to drive users to the network, while traffic has been redirected to BNB Smart Chain. 

Ethereum increases inflation

The direct result of cheap Ethereum transactions is a lower burn rate, which increases the ETH supply over time. Lower token transfer fees and blob fees limit the burn. Currently, blob fees burn around 10 ETH in 24 hours, down from over 80 ETH in February. ETH transfers burn around 30 ETH in 24 hours and are currently the biggest source of fees. 

Each week, an additional 17K ETH flows into the network in the form of payouts to validators. This creates an inflation rate of 0.72%, still relatively low but adding nearly 1M ETH for the whole year. 

For the whole year, the network burns an estimated 25K ETH unless activity shifts. The current mint and burn ratio has produced around 600K additional ETH since the chain turned inflationary. 

Another big reason for the currently low revenues of the main net are the nearly stagnant blob fees. For the first time, all major protocols pay zero blob fees. 

For the past few days, gas conditions were so favorable that all L2 protocols could operate virtually for free. Not even the most active protocols like Base or Arbitrum pay back to Ethereum. 

At the same time, Base and Arbitrum retain their level of active addresses, and they do not see an outflow of users. The recent low fee conditions are extremely favorable for L2 activity, which however does nothing for the L1 revenues. 

L2 protocols did not have to compete for blob space or posting on Ethereum blocks, hence the virtually free usage for the past few days. 

Cheap gas brings back minting protocols

The extremely accessible gas conditions brought back a type of smart contract that uses Ethereum to mint tokens. The Lightchain Protocol AI turned into the top smart contract, burning 10.34% of all gas on Ethereum. 

The second most active contract was BC.Game, linked to one of the most active Ethereum casinos. The contract burned around 6% of all gas. The two new activities displaced even the Tether (USDT) smart contract from its top position. However, on-chain minting or games may stop if gas conditions change to their previous levels.

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