Ethereum Remains Revenue King as Competing L1s Get Crushed

Crypto network fees and revenue are good indicators of market conditions. In a bull market, demand is high, and fees and revenue increase, however, the opposite happens when the bears have control over things.

Almost half a year into the current bear market cycle, many crypto network revenues have fallen short of asset prices.

This pattern has been noticed by Crypto Pragmatist founder Jack Newwald on June 7, who revealed why he thinks Ethereum remains the king of the crop.

DeFi status

A thread on how the last 180 days has affected crypto fees and revenue:

— Jack Newwald (@JackNiewold) 6 June 2022

Ethereum is the king of fees

Taking network fees into account, Ethereum became unusable to the average person in November and May when gas prices hit the triple digits. However, some were still willing to pay that much to use the network, which is a testament to the Ethereum block space demand.

“Ethereum Blockspace is a premium product: something that goes after the highest-end, customers who are most willing to pay at any cost. Just look at the BAYC land sale.”

Neuwald observed that alternative layer-1 networks do not benefit from this fee reflexivity “as their competitive advantage dies out in periods of low activity.”

He used Solana as an example, which has seen price crush on-chain over the past few months. Five outages this year have also been damaging for Solana, once considered the “Ethereum killer”.

This graph looks very worrying if you are building applications on Solana. Economic activity has come to a standstill in the last two months. pic.twitter.com/XfEoL9vYT3

— Jim Greco (@jgreco) 6 June 2022

As a result, alternative layer-1s may be overvalued, he said, or they may be “valued on potential, not activity.”

fee pigs

A token terminal chart was used to depict the top ten “fee pigs” over the past six months. They all managed to surpass $10 million in daily revenue during bull cycle peak, but are struggling to reach $1 million at the moment. The conclusion was very clear:

“And Ethereum, as always, remains king.”

So where is fee revenue heading?

There have been strong weeks of optimism and hop protocol, perhaps due to the optimism airdrop.

Here’s a look at the top revenue producers of the last 180 days:

There’s no real theme here other than some major narrative rotation. pic.twitter.com/6GJmTXCMkj

— Jack Newwald (@JackNiewold) 6 June 2022

According to Cryptofice, the average daily fees for Ethereum over the past week have been just over $10 million per day.

Bullish on-chain metrics have not been reflected in the price of the underlying asset, however, as the sell-off continues.

According to CoinGecko, Ethereum is down 6% in the past 24 hours to $1,750. The world’s second largest crypto has lost 12% over the past week and is now down 64% from its November highs.