Ethereum Transactions Near Peak Amid Layer-2 Competition
Ethereum’s daily transactions have climbed to near all-time highs, averaging 1.7 million per day, reflecting sustained network demand. However, competition from Layer-2 networks like Arbitrum (3.4M tx) and Base (8.6M tx), plus rival L1 blockchains including Aptos (3.8M), Solana, and Sui, is eroding Ethereum’s market share and protocol revenue. The March 2024 Dencun upgrade cut base-layer fees and incentivized cheaper Layer-2 solutions, driving a sharp drop in on-chain fees and keeping active addresses flat at 400k–600k. Stakeholders are now reevaluating scaling strategies to maintain Ethereum’s smart contract dominance and secure long-term growth amid mounting competitive pressure.
Neutral
The surge in Ethereum transactions indicates robust network usage, which could support price in the short term, especially if on-chain activity drives demand for ETH. However, persistent shifts to Layer-2 platforms and declining network fees reduce protocol revenue and may weigh on staking rewards and developer incentives. In the long term, Ethereum’s price outlook hinges on its ability to implement scaling solutions and retain market share against alternative blockchains and Layer-2 competitors. This mixed outlook suggests a neutral market impact until scalability and revenue models stabilize.