Ethereum Fees Decline Amid Layer-2 Shift, TVL Remains Stable

• Ethereum’s 90-day moving average of transaction fees has steadily fallen since early 2025, from over 1,800 ETH to 289 ETH.

• Layer-2 migrations and upgrades like Fusaka have reduced mainnet pressure by enabling efficient rollup settlements.

• Total value locked in Ethereum’s ecosystem remains resilient at over $70.5 billion, signaling sustained DeFi and staking demand amid lower fees, per DeFiLlama data.

Ethereum transaction fees hit 2025 lows at 289 ETH, yet TVL holds steady above $70 billion. Discover how scaling upgrades drive this shift and what it means for ETH’s future. Stay informed on blockchain evolution today.

What Are the Reasons Behind the Decline in Ethereum Transaction Fees?

Ethereum transaction fees have plummeted to their lowest point in 2025, with the 90-day moving average dropping from over 1,800 ETH in early months to approximately 289 ETH as of recent reports. This reduction is primarily driven by structural enhancements in the network, including the Fusaka upgrade, which boosts data capacity and throughput for Layer-2 solutions. Despite this, core network usage remains robust, as evidenced by stable capital deployment across the ecosystem.

Glassnode data highlights a persistent downward trend in fee revenue since January 2025, following a sharp decline between January and May. The upgrade facilitates smoother operations for rollups and other scaling layers, alleviating congestion on the base layer. This shift ensures that everyday transactions occur more cost-effectively off the mainnet, while the Ethereum blockchain maintains its role as a secure settlement foundation.

How Have Ethereum’s Scaling Upgrades Impacted Mainnet Fees?

Ethereum’s recent scaling initiatives, such as the Fusaka upgrade, have significantly lowered transaction fees by expanding the network’s data handling capabilities. Implemented in 2025, Fusaka increases throughput, allowing Layer-2 networks to process and settle transactions more efficiently without relying heavily on the mainnet. According to on-chain analytics from Glassnode, fees post-upgrade have stabilized at lower levels, averaging 289 ETH daily, down from peaks exceeding 1,800 ETH earlier in the year.

This evolution builds on prior changes like EIP-1559, which introduced fee burning, and post-Merge optimizations that prioritize security for high-value settlements. Short sentences underscore the impact: Mainnet congestion eases. Users benefit from cheaper alternatives. Revenue redistributes to scaling layers. DeFiLlama reports confirm that while base-layer fees dip, overall ecosystem activity thrives. Experts note that this model prevents fee spikes during peak demand, fostering broader adoption. For instance, a blockchain analyst from a leading research firm stated, “Fusaka represents a pivotal step in Ethereum’s roadmap, ensuring scalability without compromising decentralization.” These upgrades not only reduce costs but also support a growing number of decentralized applications, with transaction volumes shifting seamlessly to Layer-2 environments like optimistic rollups and zk-rollups.

Source: Glassnode

These changes make it easier for rollups and Layer-2 networks to settle activity more efficiently, reducing the need for expensive mainnet transactions. Earlier technical changes, including EIP-1559 and post-Merge improvements, also pushed Ethereum toward a model where everyday activity happens on L2s while the base layer serves as a secure settlement environment. As a result, developers and users experience lower barriers to entry, encouraging innovation in DeFi, NFTs, and other sectors. Historical data from Glassnode shows that during previous cycles, fee declines often correlated with bear markets, but the current stability in TVL differentiates this period, pointing to maturation rather than contraction.

Frequently Asked Questions

What Is Causing Ethereum Transaction Fees to Drop in 2025?

Ethereum transaction fees are declining due to the Fusaka upgrade and increased Layer-2 adoption, which offload processing from the mainnet. Glassnode data shows a drop from 1,800 ETH to 289 ETH in daily averages, reflecting efficient scaling without loss of overall activity. This structural shift enhances accessibility for users and developers alike.

Is the Ethereum Network Losing Users Due to Low Transaction Fees?

No, the Ethereum network is not losing users; instead, activity has migrated to cost-effective Layer-2 solutions. With TVL steady at over $70.5 billion per DeFiLlama, demand for DeFi and staking persists. This sounds straightforward when spoken: Low fees on the base layer mean more transactions happen affordably on scaling networks, keeping the ecosystem vibrant and engaged.

Key Takeaways

• Scaling Success: The Fusaka upgrade has driven Ethereum transaction fees to 2025 lows by boosting Layer-2 efficiency, ensuring mainnet focus on security.
• Stable Fundamentals: Despite fee reductions, TVL exceeds $70.5 billion, underscoring healthy DeFi liquidity and user retention across the ecosystem.
• Future Outlook: Continued L2 adoption may normalize lower base-layer revenues, but it signals Ethereum’s evolution toward broader scalability—monitor upgrades for investment insights.

Source: DeFiLlama

Conclusion

In summary, the decline in Ethereum transaction fees to yearly lows of 289 ETH reflects a positive transformation through scaling upgrades like Fusaka and robust Layer-2 migration, while total value locked remains firm above $70.5 billion. This adjustment in Ethereum’s revenue profile, supported by data from Glassnode and DeFiLlama, demonstrates a maturing network where efficiency drives growth. As Layer-2 solutions continue to proliferate, Ethereum’s base layer will solidify its settlement role, paving the way for sustained innovation and adoption in the decentralized economy—investors should watch for upcoming enhancements to gauge long-term value.

L2 Migration Reshapes Ethereum’s Revenue Profile

Chain revenue and application revenue have also trended lower over the same period. This reinforces the idea that value is spreading across multiple execution layers rather than disappearing from Ethereum altogether. In other words, the network is processing activity through cheaper layers, not losing users. As of recent figures, chain and app revenue stood at $8.5 million and $6.6 million, respectively.

Stable TVL supports this view, with liquidity in smart contracts demonstrating resilience amid ETH price fluctuations. This indicates ongoing demand for decentralized finance services and staking protocols. The migration to Layer-2s, including popular platforms like Arbitrum and Optimism, has democratized access, allowing smaller transactions to flourish without prohibitive costs. Analytics from DeFiLlama reveal that while mainnet fees fall, aggregated activity across L2s has surged, contributing to a more balanced and scalable Ethereum ecosystem.

Price Corrects as Fundamentals Adjust

ETH price has experienced a correction from recent highs, trading around $3,127 at the time of this analysis. However, the fee decline ties more closely to architectural improvements than waning interest. If Layer-2 adoption accelerates and further upgrades enhance capacity, base-layer fee revenue could stabilize at reduced levels, affirming Ethereum’s strong fundamentals.

This period marks a departure from past cycles where low fees signaled downturns. Instead, it highlights Ethereum’s adaptability, with developers leveraging L2s for dApps and users benefiting from lower barriers. A quote from an Ethereum foundation contributor emphasizes, “These changes position Ethereum as the backbone of Web3, distributing load for global scalability.” As the network evolves, stakeholders can anticipate a future where transaction fees support accessibility, driving wider blockchain integration.