The Ethereum blockchain had its strongest yr of operation in historical past in 2025, processing document transaction volumes and securing a big portion of the DeFi market.
Nonetheless, the crypto belongings powering the community did not replicate that development, posting double-digit losses for the yr.
In keeping with crypto slate In keeping with the information, ETH has fallen 10% because the starting of the yr and is buying and selling beneath $3,000. Its efficiency in opposition to the principle digital asset Bitcoin has additionally lagged, with the ETH/BTC ratio falling 6% because the starting of the yr.
This distinction highlights a elementary shift within the economics of the world’s most generally used business blockchain.
Whereas community utilities have soared, know-how upgrades aimed toward decreasing prices for customers have considerably diminished the income flowing to the core community, decoupling Ether’s worth from its on-rails exercise.
$100 million loss
Probably the most necessary elements in Ethereum’s monetary state of affairs this yr was the collapse of the “hire” paid by the Layer 2 community.
These networks bundle transactions to avoid wasting prices earlier than being settled on the principle Ethereum blockchain, and beforehand served as a serious supply of price revenue.
In 2024, Layer 2 networks generated $277 million in complete income. Roughly $113 million (41%) of this quantity was paid to Ethereum’s mainnet to course of knowledge and safe the community.
In 2025, that income mannequin might be reversed. Layer 2 community complete income fell 53% to $129.17 million as end-user charges had been lowered, based on Growthepie knowledge.
Nonetheless, the price paid to the Ethereum mainnet has plummeted even additional. Layer 2 Community paid roughly $10 million to Ethereum for safety in 2025, representing lower than 10% of its complete income.
The remaining $119 million was retained by layer 2 operators as income.
This successfully implies that Ethereum has sacrificed greater than $100 million in assure price revenue this yr to make sure its long-term survival.
This lower is because of the “Dencun” improve carried out final yr. This replace efficiently lowered transaction charges, successfully subsidizing the expansion of the ecosystem by decreasing the income that Ethereum collects from the “layer 2” community constructed on prime of it.
This enables the community to deal with bigger quantities of site visitors with out clogging up the principle blockchain or inflating charges.
Whereas the technical implementation has succeeded in making Ethereum cheaper and sooner, it has eliminated a serious driver of demand for the ETH token.
Beforehand, excessive community utilization led to excessive costs, and a few of it was “burned”, decreasing provide and supporting costs.
With charges reaching an all-time low in 2025, deflationary pressures on token provide have considerably eased. Because of this, Ethereum’s inflation fee has elevated by 0.204% because the September 2022 merger occasion.
Coinbase community dominates revenue share
The restructuring of Ethereum’s financial construction has created a consolidated marketplace for scaling options, with one dominant participant capturing nearly all of the sector’s income.
Base, a layer 2 community developed by US public change Coinbase, generated greater than $75 million in income in 2025. This determine represented nearly 60% of the complete Layer 2 sector’s income that yr.
Base’s monetary efficiency far outperformed its decentralized rivals. Arbitrum has held a big lead available in the market up to now, coming in second place with roughly $25 million in income.
Decrease values had been seen with different rivals. Polygon Community generated $5 million in income, whereas ConsenSys-backed Linea introduced in $3.94 million. Optimism, one other early chief within the scaling class, earned about $3.83 million.
This focus of income marks a departure from 2024, when the market was extra evenly distributed. Within the earlier yr, Arbitrum generated $42 million, Linea $36.6 million, and Scroll $35 million.
The rise of Base means that distribution channels and person expertise have develop into figuring out elements within the scaling wars.
Coinbase has been in a position to centralize its retail actions by itself rails by integrating its community straight into its change merchandise.
Because of this, a good portion of the worth generated by the Ethereum ecosystem is now amassed on the steadiness sheets of particular person company entities somewhat than on the broader community contributors.
Market share reaches multi-year excessive
Regardless of ETH’s worth efficiency, institutional adoption of the Ethereum community continues to speed up.
Out there knowledge exhibits that traders aren’t leaving the ecosystem in the hunt for sooner or cheaper blockchain alternate options, a pattern that characterizes the 2022 bear market.
By the use of background, Ethereum’s dominance within the DeFi sector grew from 2024 to 2025. The blockchain community’s mainnet at the moment secures roughly 64% of the overall worth locked (TVL) of DeFi functions, up from a cycle low of roughly 45% in 2022.
Leon Weidman, Head of Analysis at Onchain Headquarters, claimed that the market share of the Ethereum ecosystem is over 70%, together with belongings held in layer 2 networks resembling Base, Arbitrum, and Optimism.
This consolidation suggests a “flight to high quality” amongst massive capital allocators.
Because the business has matured, establishments have prioritized the safety and authorized readability of Ethereum over the speculative advantages of newer, extra unstable blockchains.
The community has successfully develop into the business’s funds layer, despite the fact that the particular mechanisms for capturing worth from its actions stay beneath strain.
On the identical time, analysts word that the soundness of the ecosystem stands in distinction to earlier market cycles.
Buying and selling volumes accelerated in direction of the tip of the yr with out the ‘prime blowout’ hypothesis usually seen throughout peak intervals, suggesting that this development is being pushed by elementary exploitation somewhat than short-term buying and selling frenzy.
Traders weigh utility versus worth
However, the widening hole between Ethereum’s operational success and market valuation presents a blended outlook for traders heading into 2026.
The ten% year-to-date drop in ETH worth displays uncertainty concerning the token’s function on this new low-fee setting.
The direct correlation between transaction quantity development and token worth development has damaged down because the mainnet is successfully subsidizing the layer 2 community.
Market observers word that whereas the ecosystem is more healthy than ever, the financial advantages are at the moment siled into the appliance and scaling layers.
However community proponents argue that this can be a essential transitional step. They declare that Ethereum has secured its place as the worldwide normal for blockchain funds by decreasing prices and rising capability.
They are saying this moat will finally enhance the long-term worth of the token, with BitMine Chairman Tom Lee believing the asset may exceed $5,000 subsequent yr.
