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Ethereum’s Transaction Fee Revenues Drop By 95%

Ethereum (ETH) has seen a 95% drop in its quarterly transaction fee revenue from its peak in Q4 2021. This decline is largely due to reduced Layer 2 contributions and a downturn in the NFT market.

Shifting Dynamics

In Q1 2025, Ethereum’s transaction fee revenue is projected to reach about $217 million, a sharp decrease from $4.3 billion in Q4 2021. The DeFi ecosystem, NFT sales, and Layer 2 TVL saw growth in 2021, but the dynamics have shifted since.

Source: TokenTerminal

Ethereum’s monthly revenues have been falling, with $150.8 million in January and $47.5 million in February 2025. Q4 2024 saw only $551.8 million in transaction fees, further highlighting the decline.

Worst Quarterly Decline

The rise of Layer 2 solutions, aided by EIP-4844, has reduced mainnet fee revenue by making transactions cheaper off-chain. Additionally, NFT activity has dropped significantly since its 2021 peak.

ETH’s price has also followed a downward trend, dropping 58.8% from its November 2021 high. In Q1 2025, ETH saw a 40% loss, marking its worst quarterly decline since 2018. As of now, ETH is trading at $1,997, with a 0.45% gain over the past day.