Ethereum’s network revenue dropped sharply in August, falling 44% month-over-month to $14.1 million, even as Ether (ETH) surged to a new all-time high of $4,957 on August 24. The decline has raised new concerns over the platform’s economic model, especially following major changes introduced in recent upgrades.
According to data from Token Terminal, Ethereum’s revenue — derived from base network fees burned and benefiting ETH holders — dropped from $25.6 million in July to just over $14.1 million in August. Simultaneously, total network fees declined around 20%, falling from $49.6 million to $39.7 million.
The sharp drop follows Ethereum’s Dencun upgrade in March 2024, which reduced base-layer transaction costs, especially for layer-2 networks that settle on Ethereum. While the update improved scalability and user experience, it also dramatically reduced revenue generated from network fees.
Despite Ethereum’s 240% rally since April, the disconnect between price appreciation and network profitability has fueled debate among analysts. Critics argue the fee compression trend undermines Ethereum’s long-term sustainability as a layer-1 protocol, while supporters maintain its infrastructure is essential to the future of decentralized finance.
Matt Hougan, Chief Investment Officer at Bitwise, said Ethereum’s appeal now lies more in its yield potential through staking. “If you take $1 billion of ETH and stake it, you’re generating earnings. Investors are used to that,” Hougan.
Ethereum’s growing Wall Street engagement in 2025 has been notable. Public ETH treasury firms are emerging, and Etherealize, a PR firm promoting Ethereum to listed companies, recently secured $40 million in funding, signaling growing institutional buy-in.
As more entities explore staking to earn yield from securing the Ethereum network, the focus is shifting from fee-based revenues to long-term value from token utility and ecosystem growth — even as fundamental debates continue.
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