Ethereum Revenue Drops 44% in August Despite ETH Price Boom — What Layer-2 Growth Means for the Network Ethereum just posted one of its sharpest declines in protocol revenue — a 44% drop in August 2025 — even as ETH traded near new all-time highs. For many investors, that sounds puzzling. If ETH is booming, why are revenues falling? Let’s break it down. Ethereum’s Revenue Drop Explained According to data from Messari, Ethereum’s protocol revenue in August was $39.2 million, down 44% from July. July revenue: ~$70M August revenue: ~$39M Decline: ~44% MoM Why Revenue Fell Despite ETH’s Rally This paradox has a simple explanation: Ethereum earns revenue from transaction fees, not ETH’s price alone. Three main factors caused the decline: Lower gas fees after Dencun upgrade → Transactions became cheaper, good for users but less revenue. More activity shifting to Layer-2 networks → L2s process transactions off-chain, reducing mainnet fee volume. Slower NFT + DeFi activity → User demand was softer compared to earlier spikes. Lower revenue doesn’t mean Ethereum is failing — it’s actually a sign of successful scaling. The Role of Layer-2 Networks Layer-2 adoption is accelerating. Networks like Arbitrum, Optimism, and Base handle a growing share of Ethereum activity. That means users pay lower fees, but Ethereum’s base layer collects less direct revenue. Long-term: More users can participate without being priced out. Market Impact ETH price held above $3,800–$4,000 despite revenue drops. Investors initially questioned whether declining revenues signaled weaker fundamentals. Analysts countered that Ethereum’s economic security model remains intact because L2 activity still ultimately settles on mainnet. Short-term revenue ≠ long-term adoption health. Conclusion Ethereum’s 44% revenue decline in August may look alarming, but the bigger picture shows a network evolving toward scalability. Lower gas fees and Layer-2 growth reduced short-term income, yet they also make Ethereum more accessible. The takeaway: Ethereum isn’t weakening — it’s becoming more usable for millions of people. Read More: Ethereum Revenue Drops 44% in August but Network Remains Healthy Key Takeaways Ethereum protocol revenue dropped 44% in August 2025. Main drivers: lower gas fees, Layer-2 migration, weaker NFT/DeFi demand. ETH price stayed strong near ATHs, showing investor confidence. Lower revenue = a sign of successful scaling, not network weakness. Ethereum Revenue Drops 44% in August Despite ETH Price Boom was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this storyEthereum Revenue Drops 44% in August Despite ETH Price Boom — What Layer-2 Growth Means for the Network Ethereum just posted one of its sharpest declines in protocol revenue — a 44% drop in August 2025 — even as ETH traded near new all-time highs. For many investors, that sounds puzzling. If ETH is booming, why are revenues falling? Let’s break it down. Ethereum’s Revenue Drop Explained According to data from Messari, Ethereum’s protocol revenue in August was $39.2 million, down 44% from July. July revenue: ~$70M August revenue: ~$39M Decline: ~44% MoM Why Revenue Fell Despite ETH’s Rally This paradox has a simple explanation: Ethereum earns revenue from transaction fees, not ETH’s price alone. Three main factors caused the decline: Lower gas fees after Dencun upgrade → Transactions became cheaper, good for users but less revenue. More activity shifting to Layer-2 networks → L2s process transactions off-chain, reducing mainnet fee volume. Slower NFT + DeFi activity → User demand was softer compared to earlier spikes. Lower revenue doesn’t mean Ethereum is failing — it’s actually a sign of successful scaling. The Role of Layer-2 Networks Layer-2 adoption is accelerating. Networks like Arbitrum, Optimism, and Base handle a growing share of Ethereum activity. That means users pay lower fees, but Ethereum’s base layer collects less direct revenue. Long-term: More users can participate without being priced out. Market Impact ETH price held above $3,800–$4,000 despite revenue drops. Investors initially questioned whether declining revenues signaled weaker fundamentals. Analysts countered that Ethereum’s economic security model remains intact because L2 activity still ultimately settles on mainnet. Short-term revenue ≠ long-term adoption health. Conclusion Ethereum’s 44% revenue decline in August may look alarming, but the bigger picture shows a network evolving toward scalability. Lower gas fees and Layer-2 growth reduced short-term income, yet they also make Ethereum more accessible. The takeaway: Ethereum isn’t weakening — it’s becoming more usable for millions of people. Read More: Ethereum Revenue Drops 44% in August but Network Remains Healthy Key Takeaways Ethereum protocol revenue dropped 44% in August 2025. Main drivers: lower gas fees, Layer-2 migration, weaker NFT/DeFi demand. ETH price stayed strong near ATHs, showing investor confidence. Lower revenue = a sign of successful scaling, not network weakness. Ethereum Revenue Drops 44% in August Despite ETH Price Boom was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story