Ethereum News Today: Ethereum hits 1.7M daily transactions as fees erode amid layer-2 competition

Ethereum’s daily transaction count has surged to near all-time highs, with over 1.7 million transactions recorded on a single day as the price of ETH inches toward $5,000. This increase in network activity highlights the ongoing relevance of Ethereum as a foundational platform for decentralized applications and smart contracts [1]. However, the rise in usage is accompanied by growing challenges, as the network contends with a shifting landscape marked by the rapid adoption of layer-2 scaling solutions and high-performance layer-1 blockchains.

Layer-2 networks such as Arbitrum and Base have demonstrated their growing appeal, with 3.4 million and 8.6 million transactions recorded, respectively, on a single day. Meanwhile, Aptos, a layer-1 competitor, processed 3.8 million transactions. These figures underscore how user activity is being increasingly funneled away from Ethereum’s mainnet, driven by the need for faster and cheaper alternatives [1]. As a result, Ethereum’s market share is being eroded, both in terms of user engagement and protocol-level revenues.

The network’s active address count has remained relatively stagnant since 2018, fluctuating between 400,000 and 600,000 with only occasional spikes above 1 million. This lack of consistent growth in unique users suggests that Ethereum is struggling to attract new participants compared to newer, more performant blockchains [1]. The competition is not limited to layer-2 solutions—layer-1 networks like Solana and Sui are also gaining traction by offering high throughput and low fees, further intensifying the pressure on Ethereum to evolve its strategy.

The decline in Ethereum’s base-layer fees has been especially pronounced since 2021–2022. The Dencun upgrade, implemented in March 2024, significantly reduced transaction costs on layer-2 networks, encouraging users to migrate to these cheaper alternatives. While this shift benefits end users by lowering costs, it has also reduced the revenue that Ethereum stakeholders previously relied on, prompting a reevaluation of the network’s long-term roadmap [1].

Polygon Labs CEO Marc Boiron has cautioned against directly competing with next-generation blockchains on performance metrics such as throughput, suggesting that such an approach could be “dangerous” for Ethereum [1]. Instead, the Ethereum Foundation is reportedly exploring ways to refine its scaling and execution strategies to better align with the evolving demands of the ecosystem.

As Ethereum navigates these challenges, its ability to maintain its position as the leading smart contract platform will depend on its capacity to adapt to user preferences and technological advancements. The network’s future will likely hinge on its ability to balance innovation with sustainability, ensuring it remains competitive in a rapidly diversifying blockchain landscape.

Source: [1] Is ETH transaction count rising amid $5K push, but competition erodes fees? (https://cointelegraph.com/news/eth-transaction-count-rising-5k-push-competition-erodes-fees)