Ethereum’s Layer 1 community processed extra transactions than ever whereas charging customers virtually nothing for the privilege.
Every day transactions on Ethereum L1 peaked at 1.87 million on December 31, 2025, blowing previous the earlier document of 1.61 million set through the frenzy of Might 2021. In the meantime, common transaction fees have cratered to round $0.21 in latest readings, with some durations dipping as low as $0.15. That’s a decline of greater than 50% year-over-year, and it represents an all-time low for cost-per-transaction on the community.
How Ethereum broke the fee-activity correlation
The important thing inflection level was the Dencun improve, which went reside in March 2024. It launched one thing known as proto-danksharding via EIP-4844, which created a less expensive approach for Layer 2 rollups to submit their information again to Ethereum’s most important chain. Earlier than Dencun, L2s needed to compete with common customers for a similar restricted blockspace. After Dencun, they received their very own devoted, discounted lane.
The outcome was a cascading aid impact. Layer 2 networks like Arbitrum, Optimism, and Base may course of transactions way more cheaply, which pulled an enormous quantity of activity off L1. The principle chain, free of congestion, may deal with its remaining visitors at a fraction of the previous value.
Quarterly transaction quantity tells the broader story. Q1 2026 logged a document 200.4 million transactions on Ethereum L1. Lively addresses hit all-time highs alongside transaction volumes as far again as October 2025.
The burn downside no one desires to speak about
Because the Merge in September 2022, Ethereum has burned a portion of each transaction price, eradicating ETH from circulation completely. When fees had been excessive, the burn price exceeded new ETH issuance, making the asset deflationary.
That math doesn’t work when fees are this low. Every day ETH burned from transaction fees hit an all-time low of roughly 53 ETH on some days in 2025, a rounding error in comparison with the hundreds of ETH that had been being torched every day throughout peak durations in 2022 and 2023. Regardless of document activity, the community merely isn’t producing sufficient price income to take care of the deflationary stress that traders had come to count on.
What this implies for traders
A budget-fees-plus-high-activity mixture is a double-edged sword for ETH as an funding. On one aspect, decrease boundaries to entry are clearly driving adoption. Extra customers, extra transactions, and extra energetic addresses all level to a more healthy, extra accessible community.
On the opposite aspect, the financial worth of that activity is more and more being captured someplace apart from Ethereum L1. When customers transact on Layer 2 rollups, the fees they pay go primarily to these L2 networks. Ethereum L1 collects a small settlement price, nevertheless it’s a fraction of what it used to earn when all activity occurred immediately on mainnet.
