CoinDesk Reports:
Despite Ethereum’s current annual fee income leading the web3 industry, recent plummeting gas prices are poised to weaken its dominant position. According to Lookonchain data, Ethereum network generated $2.73 billion in revenue over the past 12 months, surpassing Bitcoin’s $1.3 billion and Tron’s $459.4 million. By revenue share, Ethereum holds 53.5% of the top nine blockchains’ cumulative fees, with Bitcoin at 25.5% and Tron at 9%.
However, with Ethereum’s gas fees recently plunging to multi-year lows, its ranking appears set to slip. TokenTerminal’s 30-day annualized data forecasts Ethereum to yield $1.65 billion in annual income, placing it second behind Tron, projected to accumulate $1.72 billion in fees over the next 12 months. Bitcoin’s income is expected to reach $1.17 billion annually, but its bi-weekly annualized fee amounts to just $450 million.
Gas Fee Plummet
Etherscan data shows Ethereum’s gas prices have plummeted since March, with average daily gas prices dropping 88% from 98.7 gwei on March 5 to today’s 11.6 gwei. Dune Analytics data further reveals that on June 29 and June 30, average gas prices fell below 3 gwei, the lowest since 2016. This decline coincides with Ethereum’s London upgrade activation, significantly reducing costs for layer-two transaction completion by replacing gas-intensive call data with lightweight binary large objects (blobs).
Data from GrowtThePie indicates that since the upgrade’s launch, secondary layer networks submitting transactions to the Ethereum mainnet have seen related costs drop by several orders of magnitude. While top L2s including Arbitrum, OP Mainnet, ZkSync Era, and Base paid $262,000 to $601,000 in mainnet fees on March 5, current fees on these networks range from hundreds to $3,000.
While lower fees ease access to Ethereum, this trend also threatens its deflationary narrative. According to Ultra Sound Money, Ethereum’s ether spent on transaction fees is plummeting, with the network inflating approximately 50,000 ether monthly.
Tron Activity Surge
In contrast, Tron’s fee income surged as more users leveraged the network for low-cost stablecoin transfers. A November 2023 Brevan Howard paper indicates over 2.4 million wallets interact weekly with USDT on Tron, compared to 265,000 on Ethereum. Data shared by IntoTheBlock in April highlights Tron’s weekly dollar transaction volume as double that of Ethereum, totaling $110 billion. According to Lookonchain, on June 26, Tron’s daily dollar transaction volume hit $16.9 billion.
Tether data reveals over 53% of its $59 billion supply currently resides on Tron, surpassing Ethereum’s $50 billion at 44%.
Bitcoin Income Decline
While Bitcoin initially disclosed robust annual fee income amid congestion caused by Runes’ proliferation, recent declines in Runes activity led to fee income plummeting. Launched in January 2023, Runes introduced Ordinals, allowing users to create NFT-like assets by engraving data into Bitcoin satoshis. General tokens also spawned BRC-20, enabling tokenizing on the Bitcoin blockchain.
Runes gained immense popularity in Q2 and Q3 2024, boosting Bitcoin transaction volumes to historic highs and soaring fee incomes. The sector saw a resurgence in November, coinciding with market activity surrounding Bitcoin ETF spot speculation, yielding hefty incomes for miners until Rune volumes declined again by February.
Data from the Block indicates that while initial Rune activity rapidly diminished, Runes now comprise 24.5% of Bitcoin conversions, down from a peak of 77.3% on April 20.
Consequently, Bitcoin’s daily fee income has stabilized around $1 million in recent weeks, contrasting with figures ranging from $2 million to $10 million in January.