The Ethereum blockchain recorded its strongest operational 12 months in historical past in 2025, processing report transaction volumes and securing the overwhelming majority of the DeFi market.
Nevertheless, the crypto asset that powers the community didn’t mirror that progress, posting double-digit losses for the 12 months.
In keeping with CryptoSlate’s knowledge, ETH is buying and selling down 10% year-to-date at underneath $3000. Its efficiency towards Bitcoin, the flagship digital asset, has additionally lagged, with the ETH/BTC ratio falling 6% for the reason that begin of the 12 months.
This divergence highlights a elementary shift within the economics of the world’s most generally used industrial blockchain.
Whereas community utility has soared, technical upgrades designed to decrease prices for customers have considerably diminished the income flowing to the core community, decoupling the value of Ether from the exercise on its rails.
The $100 million loss
Probably the most important consider Ethereum’s monetary profile this 12 months was the collapse of “lease” paid by Layer-2 networks.
These networks, which bundle transactions collectively to save lots of prices earlier than settling them on the primary Ethereum blockchain, beforehand served as a significant supply of charge income.
In 2024, Layer-2 networks generated $277 million in whole income. Of that quantity, they paid roughly $113 million—or 41%—to the Ethereum mainnet to course of knowledge and safe the community.
In 2025, that income mannequin inverted. In keeping with Growthepie knowledge, the entire income for Layer-2 networks fell 53% to $129.17 million as charges have been lowered for finish customers.
Nevertheless, the associated fee paid to the Ethereum mainnet plummeted even additional. Layer-2 networks paid round $10 million to Ethereum for safety in 2025, representing lower than 10% of their whole income.
The remaining $119 million was retained as revenue by the Layer-2 operators.
Successfully, this meant Ethereum sacrificed greater than $100 million in assured charge income this 12 months to safe its long-term survival.
This decline stems from the “Dencun” upgrade applied final 12 months. The replace efficiently lowered transaction charges, successfully subsidizing the ecosystem’s progress by decreasing the revenue Ethereum collects from the “Layer-2” networks constructed on high of it.
This allowed the community to course of greater volumes of visitors with out clogging the primary blockchain or spiking charges.
Whereas the technical implementation succeeded in making Ethereum cheaper and sooner, it eliminated a key driver of demand for the ETH token.
In earlier years, excessive community utilization resulted in excessive charges, a portion of which have been “burned” thereby decreasing provide and supporting the value.
With charges hitting report lows in 2025, the deflationary strain on the token provide has weakened considerably. In consequence, Ethereum’s inflation rate has elevated by 0.204% for the reason that merge occasion in September 2022.
Coinbase community dominates revenue share
The rearrangement of Ethereum’s economics has created a consolidated marketplace for scaling options, with one dominant participant capturing the vast majority of the sector’s earnings.
Base, the Layer-2 network developed by the publicly traded US alternate Coinbase, generated greater than $75 million in income in 2025. This determine represents practically 60% of the whole Layer-2 sector’s income for the 12 months.
Base’s monetary efficiency far outpaced its decentralized rivals. Arbitrum, which held a big market lead in prior years, generated roughly $25 million in income, taking second place.
Different rivals noticed decrease values. The Polygon community generated $5 million in income, whereas Consensys-backed Linea introduced in $3.94 million. Optimism, one other early chief within the scaling sector, earned roughly $3.83 million.
This focus of income marks a departure from 2024, when the market was extra evenly distributed. Within the earlier 12 months, Arbitrum generated $42 million, Linea generated $36.6 million, and Scroll generated $35 million.
The rise of Base means that distribution channels and consumer expertise have change into the deciding elements within the scaling wars.
By integrating the community straight into its alternate merchandise, Coinbase has efficiently funneled retail exercise onto its personal rails.
Consequently, a good portion of the worth generated by the Ethereum ecosystem now accrues to the steadiness sheet of a definite company entity somewhat than the broader community individuals.
Market share hits multi-year excessive
Regardless of ETH’s price performance, institutional adoption of the Ethereum network continues to be accelerating.
Accessible knowledge signifies that buyers are usually not leaving the ecosystem for sooner or cheaper different blockchains, a development that outlined the 2022 bear market.
For context, Ethereum’s dominance of the DeFi sector expanded all through 2024 and 2025. The blockchain community’s mainnet now secures roughly 64% of the entire worth locked (TVL) in DeFi purposes, up from a cycle low of roughly 45% in 2022.
Leon Waidmann, the top of analysis at Onchain HQ, posited that the Ethereum ecosystem’s market share rises above 70% when property held on Layer-2 networks like Base, Arbitrum, and Optimism, are included.
This consolidation suggests a “flight to high quality” amongst massive capital allocators.
Because the trade matures, establishments are prioritizing Ethereum’s safety and authorized readability over the speculative upside of newer, extra unstable blockchains.
The community has successfully change into the settlement layer for the trade, at the same time as the precise mechanism for capturing worth from that exercise stays underneath strain.
On the similar time, analysts notice that the ecosystem’s stability stands in distinction to earlier market cycles.
Transaction volumes are accelerating into the year-end with out the “blow-off high” hypothesis sometimes seen throughout peaks, suggesting the expansion is pushed by elementary utilization somewhat than short-term buying and selling frenzies.
Buyers weigh utility towards worth
Nonetheless, the widening hole between Ethereum’s operational success and its market valuation presents a fancy outlook for buyers heading into 2026.
The ten% year-to-date decline in ETH’s value displays uncertainty concerning the token’s position on this new low-fee surroundings.
With the mainnet successfully subsidizing the Layer-2 networks, the direct correlation between elevated transaction quantity and elevated token value has been disrupted.
Market observers level out that whereas the ecosystem is more healthy than ever, the monetary advantages are presently siloed within the utility and scaling layers.
Nevertheless, the community supporters argue that this can be a essential transition part. They argue that Ethereum has secured its place as the worldwide customary for blockchain settlement by decreasing prices and growing capability.
In keeping with them, this moat that may finally drive long-term worth to the token with BitMine Chair Tom Lee believing the asset may rise above $5000 subsequent 12 months.
